US wholesale inventories fall sharply in January

U.S. wholesale inventories dropped sharply in January, a trend that if sustained could result in inventory investment being a drag on economic growth in the first quarter.

Stocks at wholesalers decreased 0.5% after falling 0.1% in December, the Commerce Department's Census Bureau said on Thursday. Inventories, a key part of gross domestic product, increased 1.0% on a year-over-year basis in January. 

The Census Bureau is still catching up on data releases following delays caused by last year's government shutdown.

There were decreases in the stocks of motor vehicles, lumber, metals and hardware as well as medication, chemical, farm products, petroleum and alcohol. Furniture, professional equipment, electrical and apparel inventory increased. 

Business inventories added to the 0.7% annualized GDP growth pace in the fourth quarter, despite marking their third straight quarterly decline. The economy grew at a 4.4% pace in the July-September quarter.

Sales at wholesalers increased 0.5% in January after surging 1.3% in December. At January's sales pace it would take 1.25 months to clear shelves, down from 1.26 months in December. The inventories/sales ratio was at 1.33 months in January 2025.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama )