* Wholesale inventories rise 1.1 percent in March
* Sales at wholesalers increase 1.4 percent
* Data seen limiting downside revision to first-quarter GDP
(Recasts; adds details, analyst comments)
By Lucia Mutikani
WASHINGTON, May 9 A big rise in U.S. wholesale
inventories in March is likely to temper an expected downward
revision to the government's estimate of first quarter economic
growth, but fall short of keeping it from being pushed into
The Commerce Department said on Friday wholesale inventories
increased 1.1 percent after an upwardly revised gain of 0.7
percent in February.
Economists, who had expected wholesale stocks to rise 0.5
percent, said the increase in March was larger than the
government had assumed in its advance gross domestic product
estimate published last week.
The GDP report suggested the economy grew at a 0.1 percent
annual pace in the first three months of the year, but data
released since then on trade, construction spending and factory
inventories has led economists to expect an update on GDP later
this month to show a contraction.
"This may boost the inventory reading for the first quarter
and temper the extent of a negative GDP in the first quarter,"
Anthony Karydakis, chief economic strategist with Miller Tabak
in New York, said of the wholesale inventory data.
Inventories are a key component of GDP changes. The GDP
report last Wednesday showed businesses accumulated $87.4
billion worth of stock in the first quarter, a sharp slowdown
from $111.7 billion in the final months of 2013.
That resulted in inventories slicing off more than half a
percentage point from first-quarter GDP.
The slow pace of inventory accumulation combined with an
abnormally cold winter to hold down GDP growth to a 0.1 percent
annual pace in the first three months of the year, according to
last week's GDP report.
Businesses ramped up their pace of restocking in the second
half of 2013, but the goods ended up piling up in warehouses.
And with demand for goods slackening in the first quarter,
businesses placed fewer orders with manufacturers.
In March, wholesale stocks excluding autos, the component
that goes into the calculation of GDP, increased 1.0 percent.
"We are taking our tracking estimate of first quarter real
GDP growth up from -0.8 percent to -0.6 percent," said Daniel
Silver, an economist at JPMorgan in New York.
Sales at wholesalers rose 1.4 percent in March after
increasing 0.9 percent the prior month.
At March's sales pace it would take 1.18 months to clear
shelves, down from 1.19 months in February.
(Reporting by Lucia Mutikani; Additional reporting by Richard
Leong in New York; Editing by Paul Simao)