U.S. wholesale inventories in November rose slightly more than previously reported, posting their largest gain in two years and suggesting inventory investment would again support economic growth in the fourth quarter.
The Commerce Department said on Tuesday wholesale inventories rose 1.0 percent after slipping 0.1 percent in October. That was the largest increase since November 2014. The department reported last month that wholesale inventories rose 0.9 percent in November.
The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale stocks excluding autos - increased 0.7 percent in November.
Inventory investment contributed half a percentage point to the economy's 3.5 percent annualized growth rate in the third quarter. Inventories had weighed on GDP growth since the second quarter of 2015.
A report last week showed stocks at manufacturers increased in November for a second straight month. Data on retail inventories due to be released on Friday could shed more light on the size of the boost to fourth-quarter GDP from inventory investment.
The Atlanta Federal Reserve currently forecasts GDP rising at a 2.9 percent pace in the fourth quarter.
In November, wholesale stocks of farm products surged 5.0 percent after a rise of 2.9 percent in October. Wholesale inventories of petroleum climbed 2.7 percent, while automobile stocks increased 3.2 percent.
Machinery inventories fell 0.2 percent in November.
Sales at wholesalers rose 0.4 percent in November after a gain of 1.1 percent in October. Sales were lifted by a 1.3 percent rise in sales of machinery as well as a 0.5 percent increase in sales of automobiles.
At November's sales pace it would take wholesalers 1.32 months to clear shelves, up from 1.31 months in October.
While that ratio has declined from the 1.37 months touched in January, which was the highest since March 2009, it remains relatively high. That suggests limited scope for a strong increase in wholesale inventory investment.