U.S. wholesale inventories fell for the second consecutive month in November amid an effort by businesses to reduce a stockpile of unsold goods, while sales at the wholesale level plunged by the most in 10 months, the government reported Friday, indicating that economic growth slowed sharply in the fourth quarter.
The Commerce Department said wholesale inventories fell 0.3 percent in November as inventories of both durable and nondurable goods fell. October wholesale inventories also fell 0.3 percent.
Sales by wholesalers fell 1 percent in November, the biggest decline since last January, after falling 0.2 percent in October.
Inventories are a key component in changes to gross domestic product (GDP). The measure of wholesale inventories that is entered into the calculation of GDP—wholesale stocks excluding autos—fell 0.4 percent in November.
The report added to weak data on construction spending, export growth, and manufacturing that have suggested that GDP growth slowed sharply in the last three months of 2015.
Fourth-quarter growth estimates—which currently range from as low as a 0.4 percent annual rate to as high as a 1.1 percent rate—are likely to be revised further downward following the wholesale-inventory report. The economy grew at a 2.0 percent rate in the third quarter.