Wholesale inventories in the United States rose 0.4% in December, the government reported Thursday. and contributed to strong gross domestic product in the fourth quarter.
Inventories are goods produced for sale that have not yet been sold. Companies tend to increase inventories when sales increase. Sales in the month increased by 0.7%.
The inventory-to-sales ratio remained unchanged at 1.34 months. A year ago the ratio was much higher than 1.40.
The ratio reflects the time it takes for a company to sell all the goods on the warehouse shelves. The lower values compared to last year suggest that companies are taking less time to sell their products.
Companies have also reduced production slightly to ensure they don’t get stuck with unwanted goods.