Phenominal Q4 2021 GDP growth largely driven by warehouse inventory build up

Not so good news! What will be the impact of this on the Q1 2022?

"... One reason the recovery feels so bad is that much of it took place in the warehouses. The biggest factor in GDP growth in the fourth quarter was an increase in business inventories. This alone was responsible for 4.9 points of the 6.9 rate in the fourth quarter. What that indicates is that businesses produced a lot more than they sold in the fourth quarter. But since GDP is a measure of production, the inventory build counts as a positive.

So why was the inventory build so much bigger than expected? Inflation likely made a contribution. Businesses expecting prices to keep climbing have an incentive to stockpile now at a lower cost so they can sell later at the inflated prices. And we suspect that the early holiday shopping likely played a role by pumping up expectations for huge holiday sales. ..."

Breitbart Business Digest