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Automobiles boost U.S. business inventories in November

Automobiles are shown for sale at a car dealership in Carlsbad, California, United States, May 2, 2016. REUTERS / Mike Blake / File Photo

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WASHINGTON, Jan. 14 (Reuters) – U.S. companies maintained a strong pace of inventory build-up in November, with motor vehicle inventories rebounding a little more than initially thought, suggesting the worst of the chain’s problems global supply was probably behind.

Business inventories rose 1.3% after a similar gain in October, the Commerce Department said on Friday. Inventories are a key component of gross domestic product. November’s hike was in line with economists’ expectations.

Inventories rose 8.7% year-on-year in November.

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Retailer inventories accelerated 2.0% in November, as estimated in a preliminary report released last month. This followed a 0.3% increase in October. Motor vehicle inventories rebounded 4.2% from 4.1% according to last month’s estimates.

This increase suggested that the global semiconductor shortage, which has limited motor vehicle production, was diminishing.

A survey by the Institute for Supply Management last week showed improved deliveries from suppliers to factories in December. But there are fears that a global increase in COVID-19 cases, driven by the Omicron variant, could slow the unraveling of supply chains.

The inventories of non-auto retailers, which enter the GDP calculation, jumped 1.3% according to last month’s estimates.

A slower pace of destocking in the third quarter is responsible for most of the 2.3% rate of increase in GDP growth for this period. Stocks have been depleted for much of 2021, and shortages linked to the coronavirus pandemic make it more difficult to replenish stocks. Replenishment keeps manufacturing buzzing and supports the overall economy.

Wholesale inventories rose 1.4% in November. Manufacturers’ inventories rose 0.7%.

Business sales rose 0.7% in November after rising 2.2% in October. At the rate of sales in November, it would take 1.25 months for businesses to clear their shelves, compared to 1.24 months in October.

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Reporting by Lucia Mutikani; Editing by Andrea Ricci

Our standards: Thomson Reuters Trust Principles.





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