U.S. Wholesale Inventories Rebound Moderately in October

WASHINGTON (Reuters) – U.S. wholesale inventories experienced a modest rebound in October with a slight rise in long-lasting manufactured goods.

The Commerce Department's Census Bureau reported on Monday that wholesale inventories increased by 0.2% as estimated last month, following a 0.2% decrease in September. Economists had anticipated that the inventory gain, a crucial part of gross domestic product, would remain at 0.2%.

Year-on-year, inventories rose by 0.9% in October.

There is potential for further inventory increases in the coming months as businesses, wary of looming higher tariffs, stockpile goods. President-elect Donald Trump has indicated a plan to impose a 25% tariff on products from Mexico and Canada and an additional 10% tariff on goods from China on his first day in office.

Durable goods inventories saw a slight uptick of 0.1%, driven by increases in furniture, professional equipment, and lumber stocks. However, motor vehicle inventories dropped by 0.1%, while electrical goods fell by 1.0%.

In the nondurable goods sector, inventories rose by 0.3%, particularly in groceries and medications.

Private inventory investment posed a minor drag on GDP in the third quarter, with the economy growing at an annualized rate of 2.8% from July to September.

Sales at wholesalers dipped by 0.1% in October, following a 0.5% rise in September. The current sales pace indicates it would take wholesalers 1.34 months to sell off their inventories, unchanged from September.