WASHINGTON - U.S. wholesale inventories surged in December for a second straight month, as previously reported, and sales recorded their biggest increase since 2011, signs of confidence in the economy amid strengthening domestic demand.
The Commerce Department said on Thursday that wholesale inventories increased 1.0 percent after a similar jump in November.
The back-to-back strong increases of stock accumulation, however, suggest a moderation in the pace of inventory investment in the months ahead.
The department reported last month that wholesale inventories rose 1.0 percent in December.
The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - increased 0.9 percent in December.
Inventory investment contributed one percentage point to the economy’s 1.9 percent annualized growth rate in the fourth quarter. That was the second straight quarterly contribution to GDP growth.
Inventories had been a drag on GDP growth since the second quarter of 2015.
But the fourth-quarter surge in restocking suggests that inventory accumulation could slow in the near term, which could weigh on economic growth in early 2017.
Sales at wholesalers jumped 2.6 percent in December, the largest increase since March 2011, after increasing 0.5 percent in November.
At December’s sales pace it would take wholesalers 1.29 months to clear shelves, the smallest since December 2014 and down from 1.31 months in November.
The ratio has declined from the 1.37 months touched in January of last year, which was the highest since March 2009.
Reporting by Lucia Mutikani; Editing by Paul Simao