Business Inventories Rise in November, Give Boost to GDP

Inside a Liquor Distribution Warehouse Ahead of Business Inventories Data
Daniel Acker/Bloomberg via Getty Images
By Lucia Mutikani

WASHINGTON -- U.S. business inventories rose in November, suggesting restocking would be a boost to economic growth in the fourth quarter instead of being a drag as was previously feared.

The Commerce Department said Tuesday inventories increased 0.4 percent after rising 0.8 percent in October.

Economists polled by Reuters had forecast inventories rising 0.3 percent in November.

Inventories are a key component of gross domestic product changes. Retail inventories, excluding autos -- which go into the calculation of GDP -- increased 0.6 percent after increasing 0.3 percent in October.

Businesses aggressively accumulated stock in the third quarter and warehouses were left bulging with unsold stock.

The unusually strong pace of inventory accumulation had left many economists anticipating that businesses would need to pull back, which would undercut fourth-quarter GDP growth. It appears some of the inventory build-up was planned.

Business sales rose 0.8 percent in November, the biggest rise in six months, after gaining 0.5 percent the prior month. At November's sales pace, it would take 1.29 months for businesses to clear shelves, matching the prior month.

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum

Comments

Filter by:
pgile

Not sure how, but somehow Obama has gotten to businesses and forced them to either build inventories or maybe just lie about them.

January 14 2014 at 4:18 PM Report abuse -1 rate up rate down Reply