WASHINGTON, (Reuters) - U.S. business inventories increased in February, but retail stocks excluding motor vehicles were unchanged for a second straight month, suggesting that inventory investment could weigh on first-quarter economic growth.
The Commerce Department said on Friday business inventories rose 0.3 percent after a similar gain in January.
Inventories are a key component of gross domestic product.
Retail inventories climbed 0.3 percent in February instead of the 0.4 percent increase reported in an advance report published last month. Retail inventories jumped 0.9 percent in January.
Motor vehicle inventories advanced 1.0 percent after surging 2.5 percent the prior month amid declining sales. Retail
inventories excluding autos, which go into the calculation of GDP, were unchanged for a second consecutive month as reported in March.
Inventory investment added one percentage point to the economy’s 2.1 percent annualized growth rate in the fourth
quarter. That was the second straight quarterly contribution to GDP growth after a drag that lasted more than a year.
The Atlanta Federal Reserve is estimating GDP increasing at a 0.6 percent rate in the first quarter. JPMorgan is forecasting inventories subtracting about a full percentage point from first-quarter growth.
Business sales rose 0.2 percent in February after increasing 0.3 percent in January. At February’s sales pace, it would take 1.35 months for businesses to clear shelves, unchanged from January.
Reporting by Lucia Mutikani; Editing by Andrea Ricci