WASHINGTON—U.S. business inventory accumulation increased solidly in August, though motor vehicle retailers continued to struggle to restock amid an ongoing global semiconductor shortage, which is forcing automobile manufacturers to cut production.
Business inventories rose 0.6 percent after a similar gain in July, the Commerce Department said on Friday. Inventories are a key component of gross domestic product. August’s increase was in line with economists’ expectations.
Inventories increased 7.4 percent on a year-on-year basis in August. Retail inventories gained 0.1 percent in August as estimated in an advance report published last month. That followed a 0.4 percent rise in July. Motor vehicle inventories dropped 1.4 percent instead of 1.5 percent as estimated last month.
Retail inventories excluding autos, which go into the calculation of GDP, rose 0.6 percent as estimated last month.
Business inventories were depleted in the first half of the year, but shortages amid persistent supply bottlenecks because of the COVID-19 pandemic and congestion at ports in the United States and China are making it difficult to rebuild stocks.
That has contributed to third-quarter GDP growth estimates being slashed to as low as a 1.3 percent annualized rate from as high as a 7 percent pace. The economy grew at a 6.7 percent pace in the second quarter.
Wholesale inventories increased 1.2 percent in August. Stocks at manufacturers rose 0.6 percent.
Business sales dipped 0.1 percent in August after increasing 0.5 percent in July. At August’s sales pace, it would take 1.26 months for businesses to clear shelves, up from 1.25 months in July.
By Lucia Mutikani