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US Wholesale Inventories Rise 0.3 Percent in December

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US Wholesale Inventories Rise 0.3 Percent in December

US wholesale inventories rose at a slower pace than forecast in December, fueling speculation the government may trim its estimate for fourth quarter GDP growth.

Wholesale inventories rose 0.3 percent in December, official data from the Commerce Department showed today. Economists in a Reuters poll forecast a gain of 0.5 percent, in line with the previous month. Excluding automobiles, inventories rose 0.3 percent. In all of 2013, wholesale inventories increased 3.9 percent.

Wholesale inventories are used to gauge changes in the aggregate inventory profile of US industries, which can influence GDP forecasts.

The US economy expanded at an annualized rate of 3.2 percent in the fourth quarter, according to an advance estimate from the Commerce Department. The advance estimate said inventories increased at the fastest pace since the first quarter of 1998. The government’s second GDP estimate, which will be published later this month, could show the US economy expanded 2.8 percent last quarter rather than 3.2 percent, according to some market voices.

Sales at wholesalers increased 0.5 percent in December and at an annualized rate of 5.8 percent. December sales of durable goods rose 0.3 percent from November and at an annualized rate of 5.6 percent. Sales of non-durable goods rose 0.5 percent from November and at an annualized rate of 6 percent. The inventories/sales ratio for merchant wholesalers was 1.17, compared to 1.19 in December 2012. This means it would take wholesalers 1.17 months to clear shelves.

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