WASHINGTON: U.S. wholesale inventories surged in August amid a decline in sales, though automobile stocks remained very low because of a global chip shortage, which is hampering motor vehicle production.
The Commerce Department said on Friday that wholesale inventories increased 1.2% as estimated last month. Stocks at wholesalers gained 0.6% in July. Wholesale inventories shot up 12.3% in August from a year earlier.
Motor vehicle inventories fell 0.1% after dropping 0.3% in July. Inventories are a key part of gross domestic product. Wholesale inventories, excluding autos, increased 1.3% in August. This component goes into the calculation of GDP.
Business inventories were depleted in the first half of the year, but shortages amid persistent supply bottlenecks because of the COVID-19 pandemic and congestion of ports in the United States and China are making it difficult to rebuild stocks.
Inventory rebuilding is expected to underpin manufacturing and economic growth in the second half of the year.
Sales at wholesalers fell 1.1% in August after increasing 2.1% in July. At August’s sales pace it would take wholesalers 1.23 months to clear shelves, up from 1.20 months in July.