With just a month of data, it’s too early to make big conclusions about the role of inventories in Q1 GDP, but the 0.6 percent increase in January business inventories works with Wells Fargo analysts call for a slight inventory boost.
“Business inventories added another 0.6 percent in January. Stockpiles increased every month but one last year. The initially reported increase of 0.4 percent for December inventories was revised slightly higher to 0.6 percent.”
“Since the contribution to GDP is derived from the quarterly change in inventory investment, a steady build translates into small changes like the $8 billion increase in Q4."
“It is normal for inventories to rise during an economic expansion, but to gauge the extent to which the stockpiling is intended, it is useful to look at inventories relative to sales. On this basis, we find that from manufacturing to the wholesale and retail level, the inventory building by businesses is mostly intended. That said, we will be watching the pick-up in these ratios on the wholesale and retail level after retail sales slipped again in February.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.