Total business inventories rose another 0.2% after the 1.1% surge in November. The full year increase of 7.8% was the strongest since 1988.

Retail inventories rose 0.3% in December following a 1.1% increase the prior month. Accumulation of non-auto retail inventories jumped for the second month, up 1.0%, and the year's accumulation was the strongest in ten led by a 16.9% y/y gain in building materials. Inventories of furniture (6.8% y/y) and general merchandise (6.4% y/y) also rose strongly though apparel accumulation slowed to just 1.0%.

Wholesale inventories rose another 0.4% and the yearly gain of 11.2% was a record. During the last ten years there has been a 64% correlation between the y/y change in wholesale inventories and the change in imports of merchandise.

Overall business sales jumped 1.0% (+10.6% y/y) on the strength of yearend auto sales.

The ratio of inventories-to-sales fell slightly back to the record low of 1.30. Moreover, though the rate of inventory accumulation more than quadrupled last year, it lagged the double digit gain in sales.