U.S. wholesale inventories fell sharply in January, signaling potential headwinds for first-quarter economic growth if the trend persists.
Data from the Commerce Department showed inventories dropped 0.5%, following a 0.1% decline recorded in December.
The continued drawdown suggests inventory investment could weigh on overall GDP performance during the early months of the year.
On an annual basis, wholesale inventories still posted a 1.0% increase, indicating some underlying stability despite the monthly declines.
Meanwhile, wholesale sales rose 0.5% in January, building on a strong 1.3% surge in December.
At the current pace, it would take approximately 1.25 months to clear inventories, slightly improved from 1.26 months previously.
The inventories-to-sales ratio stood at 1.33 months, reflecting a modest tightening in supply relative to demand conditions.
