U.S. wholesale inventories revised higher; sales surge

WASHINGTON: U.S. wholesale inventories increased more than initially estimated in October, suggesting inventory investment could contribute to economic growth in the fourth quarter.

The Commerce Department said Wednesday wholesale inventories surged 1.1pc in October, instead of rising 0.9pc as estimated last month.

Stocks at wholesalers rose 0.9pc in September.

The component of wholesale inventories that goes into the calculation of gross domestic product jumped 1.3pc in October.

Inventories fell 2.2pc in October from a year earlier.

Gross domestic product rebounded at a historic 33.1pc annualized growth rate in the third quarter, thanks to more than $3 trillion in government pandemic relief for businesses and workers.

That followed a 31.4pc rate of contraction in the second quarter, the deepest since the government started keeping records in 1947.

Inventories added to GDP growth last quarter after being a drag for five straight quarters.

Growth estimates for the fourth quarter are mostly below a 5pc rate because of a resurgence in new COVID-19 cases and the largely expired fiscal stimulus.

Stocks of motor vehicles and parts slipped 0.2pc in October after declining 0.4pc in September.

There were increases in stocks of lumber, electrical equipment, hardware, paper, drugs, groceries and farm products.

Motor vehicle inventories fell as did stocks of furniture, petroleum, professional equipment and machinery.

Sales at wholesalers accelerated 1.8pc in October after rising 0.4pc in September.

At October's sales pace it would take wholesalers 1.31 months to clear shelves, down from 1.32 months in September.