U.S. Wholesale Inventories Decline in November

WASHINGTON (Reuters) – U.S. wholesale inventories fell 0.2% in November, as initially estimated last month, amid sharp declines in stocks of long-lasting manufactured goods like motor vehicles and computer equipment.

Stocks at wholesalers remained unchanged in October, according to the Commerce Department’s Census Bureau. Economists polled by Reuters had expected an unrevised drop in inventories, a crucial part of gross domestic product, at 0.2%.

Overall, inventories increased 0.8% year-on-year in November.

Monthly wholesale inventories might rebound in the coming months as businesses, fearing higher tariffs, front-load imports. Government data revealed that goods imports surged 4.3% in November. President-elect Donald Trump has committed to imposing or significantly raising tariffs on imports.

Durable goods inventories fell 0.4% in November after easing 0.1% in October. Motor vehicle inventories decreased by 2.2%, and those of computer equipment dropped 1.3%. Additionally, there were declines in machinery stocks.

On the other hand, nondurable goods inventories rose by 0.2%. This increase was due to a 4.5% drop in farm products, which was more than compensated by gains in groceries, apparel, petroleum, and alcohol.

Excluding motor vehicles, wholesale inventories increased by 0.1%. This category is included in GDP calculations.

Private inventory investment slightly hindered GDP in the third quarter. The economy grew at a 3.1% annualized rate during the July-September period.

Sales at wholesalers increased by 0.6% in November after a 0.3% decline in October, driven by a 1.5% rise in durable goods sales. However, nondurable goods sales fell by 0.3%.

At the November sales pace, it would take wholesalers 1.33 months to clear shelves, down from 1.34 months in October.