Wholesale inventories fell 0.1% mm in October, coming in weaker than our and consensus expectations for a modest 0.1% mm rise. September wholesale inventory growth was revised lower as well, to 0.2% mm from the initial estimate of 0.5% mm.
In October, whole inventories of both durable and nondurable goods categories declined one-tenth. Wholesale automotive (-0.5% mm, previous 0.3%) and computer (-0.7% mm, previous -2.2%) inventories accounted for about 60% of the total decline.
The downward revision to September wholesale inventories suggests that total private inventory stocking trimmed a bit more from Q3 GDP growth than was reported in the second estimate. As a result, Q3 GDP tracking estimate fell to 1.9% after rounding. Weaker-than-expected wholesale inventory growth in October suggests a slower pace of inventory growth in Q4 as well.
"Weaker-than-expected wholesale inventories also bring down the estimated profile for total business inventory growth in October. We have revised down our forecast for the Friday release to 0.0%, from 0.1% previously", says Barclays.