WASHINGTON (Reuters) – U.S. businesses maintained a strong pace of inventory accumulation in November, with motor vehicle stocks rebounding a bit more than initially thought, suggesting the worst of global supply chain problems was likely behind.
Business inventories rose 1.3% after a similar gain in October, the Commerce Department said on Friday. Inventories are a key component of gross domestic product. November’s increase was in line with economists’ expectations.
Inventories increased 8.7% on a year-on-year basis in November.
Retail inventories accelerated 2.0% in November as estimated in an advance report published last month. That followed a 0.3% rise in October. Motor vehicle inventories rebounded 4.2% instead of 4.1% as estimated last month.
That surge suggested the global shortage of semiconductors, which has constrained motor vehicle production, was abating.
An Institute for Supply Management survey last week showed improved supplier deliveries to factories in December. But there are worries that a global surge in COVID-19 cases, driven by the Omicron variant, could slow the untangling of supply chains.
Retail inventories excluding autos, which go into the calculation of GDP, shot up 1.3% as estimated last month.
A slower pace of inventory drawdown in the third quarter accounted for the bulk of the 2.3% pace of increase in GDP growth for that period. Inventories were depleted through much of 2021, and coronavirus pandemic-related shortages are making it harder to replenish stocks. Restocking is keeping manufacturing humming and supporting the overall economy.
Wholesale inventories increased 1.4% in November. Stocks at manufacturers rose 0.7%.
Business sales increased 0.7% in November after rising 2.2% in October. At November’s sales pace, it would take 1.25 months for businesses to clear shelves, up from 1.24 months in October.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)