US business inventories rose strongly in January, though the rate slowed from previous months could lead to inventory investment making no impact on economic growth in Q1.
Source: US Census Bureau
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Business inventories increased by 1.1% after expanding by 2.4% in December. Inventories are a key element of gross domestic product. January’s increase is in line with economists’ estimates.
Retail inventories rose 2.0% in January rather than 1.9%, as estimated in an advanced report published last month. That followed a 4.7% surge in December.
Motor vehicle inventories jumped 2.4% as the estimated prior month. They grew 6.9% in December. Retail inventories, excluding autos, rose by 1.8% compared to the 1.7% estimated the previous month.
Inventory investment expanded at a robust seasonally adjusted annualized pace of $171.2B in Q4, leading to 4.90 percentage points to the quarter’s 7.0% growth rate.