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U.S. Dec business inventories unexpectedly fall

The Commerce Department said inventories slipped 0.2 percent after rising by a revised 0.5 percent in November, previously reported as a 0.4 percent increase.

Economists polled by Reuters had expected a 0.2 percent rise in December inventories.

A sharp slowdown in the pace at which businesses cut stocks of unsold goods contributed to the fastest growth rate in six years in the fourth quarter. The economy grew at an estimated 5.7 percent annual rate in the October-December period. Inventories are a key component of gross domestic product changes over the business cycle.

Manufacturers’ inventories slipped 0.1 percent in December after rising 0.2 percent in November. Retail motor vehicle and parts inventories fell 0.5 percent in December after edging up 0.1 percent the prior month.

Excluding auto, retail inventories rose 0.2 percent in December, the largest increase since September 2008. Inventories at furniture, electronic and appliance stores rose 0.6 percent after a 1.1 percent drop in November.

Business sales rose 0.9 percent in December to $1.04 trillion, the highest level since October 2008, following a 2.4 percent increase in November. The rise in sales left the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, at 1.26 months’ worth, the lowest since June 2008.