U.S. Business Inventories Rise Slightly More Than Expected In December

(RTTNews) - Business inventories in the U.S. rose by slightly more than expected in the month of December, according to a report released by the Commerce Department on Thursday.

The report said business inventories rose by 0.5 percent in December following a 0.4 percent increase in November. Economists had expected inventories to rise by another 0.4 percent.

Inventories at retailers and manufacturers increased by 0.6 percent and 0.5 percent, respectively, while wholesale inventories edged up by 0.3 percent.

The Commerce Department also said business sales inched up by 0.1 percent in December after climbing by 0.7 percent.

While wholesale sales increased by 0.5 percent, retail sales came in unchanged and sales by manufacturers dipped by 0.2 percent.

With inventories rising at a faster pace than sales, the business inventories/sales ratio ticked up to 1.30 in December from 1.29 in November.

Compared to the same month a year ago, business inventories were up by 4.4 percent in December. Business sales were up by 3.8 percent year-over-year.

Peter Boockvar, managing director at the Lindsey Group, said, "From a Q4 GDP revision standpoint, the slightly higher than expected December inventory figure will offset some but not all of the retail sales weakness where Q4 will likely print closer to 2.5-2.75% rather than the initial 3.2%."

The Commerce Department released a separate report earlier in the day showing downward revisions to the retail sales data for November and December.