NYPD officers detain activists protesting outside the Federal Reserve Bank of New York during a demonstration calling for the U.S. government to take action on climate change and reject the use of fossil fuels during Climate Week in the Financial District of New York City, New York, U.S., September 18, 2023. (Reuters/Bing Guan)
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U.S. business inventories unexpectedly fell in January amid a large decline in stocks at wholesalers, suggesting inventory investment could weigh on economic growth in the first quarter.
Inventories dipped 0.1% after being unchanged in December, the Commerce Department’s Census Bureau said on Wednesday. Economists polled by Reuters had expected that inventories, a key component of GDP and one of the most volatile, would edge up 0.1% in January.
Inventories increased 1.0% on a year-over-year basis in January. The Census Bureau is still catching up on data releases following last year’s government shutdown. Retail inventories rose 0.3% in January after gaining 0.1% in December.
Wholesale inventories dropped 0.5% while stocks at manufacturers edged up 0.1%.
Business inventories added to the 0.7% annualized GDP growth pace in the fourth quarter, despite marking their third straight quarterly decline. The economy grew at a 4.4% pace in the July-September quarter.
Business sales increased 0.3% in January after rising 0.7% in December. Sales at retailers eased 0.1%. At January’s sales pace, it would take 1.35 months for businesses to clear shelves, down from 1.36 months in December.
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(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
