WASHINGTON (Reuters) – U.S. business inventories edged up in October as modest increases in stocks at retailers and wholesalers were partially offset by a decline at manufacturers.
Inventories rose 0.1% after being unchanged in September, the Commerce Department’s Census Bureau said on Tuesday. The gain in inventories, a key component of gross domestic product, was in line with economists’ expectations. Inventories increased 2.4% on a year-on-year basis in October.
The pace of inventory accumulation could pick up in the months ahead as businesses stockpile goods in anticipation of higher import tariffs.
President-elect Donald Trump has said he would impose a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on goods from China on his first day in office.
Inventories and trade are the most volatile components of GDP. Private inventory investment was a small drag on GDP in the third quarter. The economy grew at a 2.8% annualized rate in the July-September quarter. Growth estimates for the fourth quarter are currently as high as a 3.3% pace.
Retail inventories rose 0.2% in October, revised up from the 0.1% gain estimated in an advance report published last month. They increased 0.7% in September.
Motor vehicle inventories increased 0.2%, instead of 0.3% as previously reported. They advanced 1.8% in September.
Retail inventories excluding autos, which go into the calculation of GDP, edged up 0.1% as reported last month. They increased 1.6% in September.
Wholesale inventories rose 0.2% in October, while stocks at manufacturers dipped 0.1%.
Business sales were unchanged in October after rising 0.3% in September. At October’s sales pace, it would take 1.37 months for businesses to clear shelves, unchanged from September.
