WASHINGTON, (Reuters) - U.S. 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 percent in February. Data for January was revised slightly up to show inventories rising 0.9 percent instead of the 0.8 percent 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 percent in February.
Retail inventories climbed 0.3 percent in February after increasing 0.8 percent in January. Motor vehicle inventories gained 0.3 percent in February.
Retail inventories excluding autos, which go into the calculation of GDP, increased 0.4 percent in February after advancing 0.7 percent in the prior month. This suggests inventory investment could add to first-quarter GDP.
Wholesale inventories increased 0.2 percent in February. Stocks at manufacturers rose 0.3 percent. Inventory investment added 0.11 percentage point to the fourth quarter’s 2.2 percent annualized growth rate.
Business sales edged up 0.1 percent in February after increasing 0.3 percent in January. Retail sales fell 0.3 percent in February. Sales at wholesalers gained 0.3 percent while those at manufacturers increased 0.4 percent.
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.
Reporting by Lucia Mutikani Editing by Paul Simao