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US business inventories increase steadily in February
[WASHINGTON] US business inventories increased in February and stock accumulation in the prior month was a bit stronger than initially estimated, suggesting inventory investment could contribute to economic growth in the first quarter.
The Commerce Department said on Thursday that business inventories rose 0.3 per cent in February. Data for January was revised slightly up to show inventories rising 0.9 per cent instead of the 0.8 per cent increase previously reported.
Inventories are a key component of gross domestic product, and economists polled by Reuters had forecast stocks at businesses would rise 0.4 per cent in February.
Retail inventories climbed 0.3 per cent in February after increasing 0.8 per cent in January. Motor vehicle inventories gained 0.3 per cent in February.
Retail inventories excluding autos, which go into the calculation of GDP, increased 0.4 per cent in February after advancing 0.7 per cent in the prior month. This suggests inventory investment could add to first-quarter GDP.
Wholesale inventories increased 0.2 per cent in February. Stocks at manufacturers rose 0.3 per cent. Inventory investment added 0.11 percentage point to the fourth quarter's 2.2 per cent annualised growth rate.
Business sales edged up 0.1 per cent in February after increasing 0.3 per cent in January. Retail sales fell 0.3 per cent in February. Sales at wholesalers gained 0.3 per cent while those at manufacturers increased 0.4 per cent.
At February's sales pace, it would take 1.39 months for businesses to clear shelves, unchanged from January. The motor vehicle inventory-to-sales ratio increased further in February, pointing to an unwanted piling of vehicles that could further slow production at assembly plants.