WASHINGTON (Reuters) - U.S. wholesale inventories barely rose in March as sales recorded their largest increase in nearly a year, suggesting little impact on the first-quarter economic growth estimate.
The Commerce Department said on Tuesday wholesale inventories edged up 0.1 percent. February inventories were revised down to show a 0.6 percent decrease instead of the previously reported 0.5 percent decline.
March’s increase in wholesale inventories was in line with expectations. Sales jumped 0.7 percent in March, the largest increase since April last year, after slipping 0.2 percent in February.
Despite March’s fairly strong sales pace, it would still take wholesalers 1.36 months to clear shelves, unchanged from February.
Inventories are a key component of gross domestic product changes. The component of wholesale inventories that goes into the calculation of GDP - wholesale stocks excluding autos - was unchanged in March.
The government reported last month that inventories subtracted three-tenths of a percentage point from first-quarter GDP growth, helping to restrict economic growth to a 0.5 percent annualized rate.
Data on retail sales, construction spending and factory orders have suggested the advance first-quarter GDP growth estimate could be raised to a 0.9 percent rate when the government publishes its revision later this month. The economy grew at a 1.4 percent pace in the fourth quarter of 2015.
Businesses accumulated record inventory in the first half of 2015, which outpaced demand. Though the pace of accumulation slowed, inventories remained high in the second half of 2015 and the first quarter of 2016.
Inventories have been a drag on GDP growth since the third quarter of 2015. In March, wholesale inventories of automobiles rose 1.0 percent, the largest increase since last July. There were also increases in furniture, apparel, petroleum and hardware inventories.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
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