US Wholesale inventories Fell in October

U.S. wholesale inventories fell as previously reported in October amid a surge in sales, supporting views that inventory investment would provide a modest boost to economic growth in the fourth quarter.

The Commerce Department said on Friday that wholesale inventories decreased 0.4 percent after rising 0.1 percent in September. The department reported last month that wholesale inventories declined 0.4 percent in October.

The component of wholesale inventories that goes into the calculation of GDP – wholesale stocks excluding autos – also fell 0.4 percent in October.

Inventory investment contributed half a percentage point to the economy’s 3.2 percent annualized growth rate in the third quarter. Inventories had weighed on GDP growth since the second quarter of 2015.

With a report this week showing stocks at manufacturers were unchanged in October, economists believe inventories’ contribution to growth in the fourth quarter will be modest.

Still, strong consumer demand, against the backdrop of a labor market that is near full employment, should keep the

economy on solid ground. The Atlanta Federal Reserve is forecasting GDP rising at a 2.6 percent pace this quarter.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza