WASHINGTON (Reuters) - U.S. wholesale inventories increased more than initially estimated in October, suggesting inventory investment could contribute to economic growth in the fourth quarter.
The Commerce Department said Wednesday wholesale inventories surged 1.1% in October, instead of rising 0.9% as estimated last month. Stocks at wholesalers rose 0.9% in September. The component of wholesale inventories that goes into the calculation of gross domestic product jumped 1.3% in October.
Inventories fell 2.2% in October from a year earlier.
Gross domestic product rebounded at a historic 33.1% annualized growth rate in the third quarter, thanks to more than $3 trillion in government pandemic relief for businesses and workers. That followed a 31.4% rate of contraction in the second quarter, the deepest since the government started keeping records in 1947.
Inventories added to GDP growth last quarter after being a drag for five straight quarters. Growth estimates for the fourth quarter are mostly below a 5% rate because of a resurgence in new COVID-19 cases and the largely expired fiscal stimulus.
Stocks of motor vehicles and parts slipped 0.2% in October after declining 0.4% in September. There were increases in stocks of lumber, electrical equipment, hardware, paper, drugs, groceries and farm products. Motor vehicle inventories fell as did stocks of furniture, petroleum, professional equipment and machinery.
Sales at wholesalers accelerated 1.8% in October after rising 0.4% in September. At October's sales pace it would take wholesalers 1.31 months to clear shelves, down from 1.32 months in September.