WASHINGTON (AP) -- U.S. wholesalers cut their stockpiles slightly in December while their sales were unchanged, suggesting businesses were cautious at the end of a weak quarter.
The Commerce Department said Friday that wholesale business stockpiles dipped 0.1 percent in December from November to $497.7 billion. That followed a 0.4 percent rise the previous month.
Inventories of furniture and automotive goods fell by the most in more than three years. Farm product stockpiles also dropped sharply, likely reflecting the impact of this summer's drought in the Midwest.
Less restocking reduces factory production, which slows economic growth. A big decline in restocking was a major reason the government estimated last week that the economy shrank in the October-December quarter.
Separately, the Commerce Department said the U.S. trade deficit narrowed sharply in December because exports rose while oil imports plummeted. The smaller trade gap means the economy almost surely grew in the October-December quarter — an improvement from the government's initial estimate last week.
Still, the slower growth in restocking will offset some of the improvement from a brighter trade picture. Both figures were not available when the government reported its estimate last week. The government will issue its second estimate for fourth-quarter growth on Feb. 28.
Sluggish restocking by companies and deep cuts in defense spending are expected to keep growth at the end of last year weak.
Economists at Barclays Capital on Friday said they now expect growth at an annual rate of 0.3 percent in the October-December quarter.