WASHINGTON (Reuters] – U.S. businesses saw strong growth in December and motor vehicle inventories accelerated, a sign of the end of the global shortage.

The Commerce Department reported Wednesday that business inventories rose 2.1%, after increasing 1.5% in November. Gross domestic product is a major component. The December increase was consistent with economists’ predictions. On a year to date basis, December saw inventories rise 10.5%

The December increase in retail inventory was 4.2% instead of the 4.4% estimate in an advance publication last month. This follows a November increase of 2.0%.

As predicted last month, inventories of motor vehicles accelerated by 6.8%. They rose 4.2% in November.

This would indicate that the worldwide shortage of semiconductors which had limited motor vehicle production is easing. The improvement in supply was not apparent in the producer inflation data that showed wholesale motor vehicle sales.

Prices of equipment rose by 0.7% in Jan.

Instead of the 3.6% estimate last month, retail inventories that exclude autos increased 3.3%.

The fourth quarter saw inventory investment rise at an annualized seasonally adjusted rate of $173.5 Billion, which was the second largest quarterly increase ever recorded.

Many economists think inventories could rise more, noting the fact that inflation-adjusted inventories still remain at a lower level than before the pandemic. Low sales-to-inventory ratios also exist.

The fourth quarter’s 6.9% annualized rate of growth was 4.90 percent due to inventories. Manufacturing is supported by stocking after three quarters of low inventories.

The December wholesale inventory rose 2.2%. The stock of manufacturers increased 0.3%

The December sales of businesses fell by 0.7% after an increase in 1.1% in November. Businesses would need 1.29 months to clear their shelves if December’s pace of sales is maintained, as opposed to 1.25 in November.