Business Inventories Increased More than Anticipated in December

Economists and the U.S. Department of Commerce were pleasantly surprised by the results for business inventories at the end of last year, which Reuters reported increased “more than expected” between November and December 2017.

According to a Reuters report on Feb. 14, business inventories rose nearly half a percent, 0.1% higher than economists originally predicted. Gains in stocks at manufacturers and wholesalers were believed to have contributed to the slight bump—similar to results seen in November.

“The government estimated [in January] that inventory investment subtracted a 0.67 percentage point from GDP growth in the fourth quarter,” the report stated. “The economy grew at a 2.6% annualized growth pace in the final three months of 2017.”

Retail and manufacturing inventories as well as wholesalers rose in December; however, motor vehicle inventories fell twice as much as the prior month. Reuters said December business sales also increased, albeit, slower than in November, and it takes about 1.3 months for businesses to clear their shelves.

—Andrew Michaels, editorial associate

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