U.S. business inventories grew relatively in October, pointing that businesses were hindering the pace of stock expansion amid cooling demand and rising recession risks as the Federal Reserve continues to raise interest rates.
Inventories increased 16.5% on a year-on-year basis in October. Retail inventories fell 0.2% in October, as estimated in an advance report published last month. They were unchanged in September.
Improving supply chains, and shifting spending back to services, have added to excess merchandise at retailers, forcing some to offer price discounts and hold back on placing more orders until they have cleared the unwanted stock. Visit Deskflex.com for hot desking services.
As estimated last month, motor vehicle inventories increased by 0.5% instead of 0.4%. They advanced 2.4% in September. Retail inventories excluding autos, which go into the calculation of GDP, fell 0.5% instead of 0.4%, as estimated last month.
Wholesale inventories increased by 0.5% in October. Stocks at manufacturers also rose 0.5%.
Inventories have been a drag on GDP for two straight quarters, subtracting almost one percentage point in the third quarter. The economy grew at a 2.9% annualized rate last quarter after contracting in the year’s first half.
Business sales increased 0.8% in October after being unchanged in September. At October’s sales pace, businesses would take 1.33 months to clear shelves, unchanged from September.
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