WASHINGTON, Feb 12 (Reuters) - U.S. business inventories in December recorded their biggest monthly drop since 2001 and sales fell again, according to a report on Thursday that provided more evidence the economy likely shrank at a faster pace in the fourth quarter than initially estimated.
The Commerce Department said inventories fell 1.3 percent, the largest drop since October 2001, after falling by a revised 1.1 percent in November.
Analysts polled by Reuters had forecast business inventories to fall 0.9 percent in December.
Government data on Tuesday showed wholesale inventories fell by a record 1.4 percent in December. Analysts said this made it likely that the government estimate of the economy in the fourth quarter contracting at a 3.8 percent annual rate would have to be revised to an even slower pace.
The Commerce Department said business sales dropped 3.2 percent in December after plunging by a record 5.7 percent in November, which was previously reported as a 5.1 percent drop.
That took the inventories-to-sales ratio, which measures how long it would take to empty shelves at the current pace of sales, up to 1.44 months' worth, the highest since April 2001. This compared with an inventories-to-sales ratio of 1.41 months' worth in November.
Compared to December last year, business inventories were 0.9 percent higher, while sales fell 11.8 percent, the Commerce Department said. (Reporting by Lucia Mutikani; Editing by Neil Stempleman)