April 14, 2010 / 2:04 PM / in 7 years

U.S. Feb business inventories highest since July

2 Min Read

WASHINGTON, April 14 (Reuters) - U.S. business inventories rose slightly more than expected in February to their highest level in seven months as businesses restocked to meet strengthening domestic demand, a government report showed on Wednesday.

The Commerce Department said inventories increased 0.5 percent, the largest increase since July 2008, to $1.33 trillion - the highest since July. January inventories were revised up 0.2 percent, after being previously reported as being flat. Economists polled by Reuters had expected a 0.4 percent rise in February inventories.

Inventories are a key component of gross domestic product changes over the business cycle and a sharp slowdown in the pace of inventory depletion is driving the economy's recovery that started in the second half of 2009.

Business sales increased 0.3 percent to $1.04 trillion in February, the highest level since October 2008, following a 0.7 percent increase in January. That left the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, unchanged at 1.27 months' worth.

Manufacturers' inventories rose 0.5 percent, the largest increase since August 2008, after increasing 0.3 percent the prior month. Inventories at retailers climbed 0.3 percent in February following a 0.1 percent gain in January. (Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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