US: Expect solid increase in business inventories in January - Nomura

According to analysts at Nomura, incoming data from the US point to a solid increase in business inventories in January.

Key Quotes

“Inventories at factories rose a moderate 0.3% m-o-m in January. Wholesale and retail inventories likely contributed more strongly to aggregate inventory investment in January. In our view, a strong gain in wholesale inventories seems transitory. Considering a jump in energy prices in January, the gain in wholesale inventories in January was likely inflated by inventories of fuels and related goods.”

“Solid gains in retail inventories likely reflect slowing auto sales. The increase in retail inventories in January was driven by motor vehicle and parts dealers’ inventories, which jumped 2.1% m-o-m in January. Excluding autos and parts, retail inventories rose a modest 0.3% m-o-m.”