Wholesale Inventories Revised Lower as Growth Slows More Than Previously Thought

Inventories at wholesalers in the U.S. at the end of September were lower than previously thought, the Commerce Department said Wednesday.

Inventories at wholesalers rose 0.6 percent compared with the prior month, two-tenths of a point below the advance estimate. Economists had forecast the figure would hold at a 0.8 percent gain.

The smaller-than-expected growth is likely an indication of caution on behalf of some merchants as demand slows thanks to the Fed’s tightening of financial conditions. What’s more, supply chain issues arising from lockdowns in China may be lowering inventories of computers and electronic products, which fell 0.5 percent.

Compared with a year ago, inventories are up 24.1 percent.

Inventories are a key component of gross domestic product. The slow growth of inventories in the first quarter of the year was one of the primary reasons that Gross Domestic Product contracted. Economists expect that GDP will contract slightly again in the fourth quarter.

Petroleum inventories shrank 3.8 percent but this was likely due to changes in price rather than a real decline. Gas prices dipped 4.9 percent in September and the inventory figures are not adjusted for price changes.