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10/07/24
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May Wholesale Inventories in US Higher
In May, wholesale inventories in the U.S. were solidly higher, likely putting inventory investment on target to support Q2’s economic growth.
On Wednesday, the Commerce Department’s Census Bureau said that wholesale inventories were 0.6% higher, as estimated previously last month. In April, stocks at wholesalers were 0.2% higher.
Economists polled by Reuters had forecast that inventories, a key part of GDP, would stay the same. In May, inventories dropped 0.5% on a year-on-year basis.
Investment in private inventory has been dragging on GDP for two consecutive quarters as businesses managed stocks carefully and domestic demand stayed strong.
There is guarded optimism that inventory accumulation may offset some of the expected hit on GDP from the increasing trade deficit. Growth estimates for Q2 are at about a 2% annualized rate. In the January to March quarter, the economy grew at a pace of 1.4%.
In May, wholesale motor vehicle inventories were 1.4% higher. Wholesale inventories were 0.5% higher, excluding autos. This component goes into the GDP calculation.
In May, sales at wholesalers rose 0.4% after in April increasing by 0.2%. At the sales pace seen in May, it will take wholesalers 1.35 months to empty shelves, the same as in April.
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