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US business inventories rise solidly; sales rebound

[WASHINGTON] US business inventories increased solidly in February, lifted by the largest gain in wholesale stocks since 2013, suggesting inventory investment will contribute to growth in the first quarter.

The Commerce Department said on Monday that business inventories rose 0.6 per cent after a similar increase in January. February's increase in inventories, which are a key component of gross domestic product, was in line with economists' expectations.

Wholesale inventories soared 1.0 per cent in February, the biggest increase since October 2013, after rising 0.9 per cent in January. Retail inventories gained 0.4 per cent in February as reported in an advance estimate published last month. Retail inventories increased 0.7 per cent in January.

Motor vehicle inventories climbed 0.9 per cent in February instead of the previously reported 0.8 per cent rise. Auto inventories jumped 1.7 per cent in January.

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Retail inventories excluding autos, which go into the calculation of GDP, rose 0.2 per cent as reported last month.

They edged up 0.1 per cent in January.

Inventory investment subtracted 0.53 percentage point from fourth-quarter GDP growth. The economy grew at a 2.9 per cent annualized pace in the October-December period.

Business sales rebounded 0.4 per cent February after falling 0.3 per cent in January. At February's sales pace, it would take 1.35 months for businesses to clear shelves, unchanged from January.