WASHINGTON Reuters - U.S. business inventory accumulation in August was solid, though motor vehicle retailers continued to struggle to restock amid an ongoing global semiconductor shortage, forcing automobile manufacturers to reduce production.
Business inventories rose 0.6% after a similar gain in July, Commerce Department said on Friday. Inventories are a key component of gross domestic product. August's expansion was in line with economists' expectations.
In August,Inventories increased 7.4% year on year. Retail inventories gained 0.1% in August as estimated in advance by an additional report published last month. That followed a 0.4% rise in July. Motor car inventories dropped 1.4% instead of 15% 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 North Dakota and China are making it difficult to rebuild stocks.
That has contributed to a third quarter GDP growth estimates being cut to as high as a 1.3% annualized rate from as low as a 7% pace. The economy grew at a pace of 6.7% in the second quarter.
Business sales dropped in August after a 0.1% increase in July. At August sales pace it would take 1.26 months for businesses to clear shelves, up from 1.25 months in July.