WASHINGTON (Reuters) - U.S. business inventories recorded their biggest drop in six months in April, which could temper expectations that inventory investment would support economic growth in the second quarter.
The Commerce Department said on Wednesday business inventories fell 0.2 percent, the largest decrease since last October, reversing March’s 0.2 percent gain.
Inventories are a key component of gross domestic product. Retail inventories declined 0.2 percent in April instead of the 0.3 percent drop reported in an advance report published last month. Retail inventories rose 0.2 percent in March.
Motor vehicle inventories dropped 0.4 percent, instead of the previously reported 0.5 percent decrease. Motor vehicle inventories advanced 0.4 percent in the prior month.
Retail inventories excluding autos, which go into the calculation of gross domestic product, decreased 0.2 percent as reported last month. They edged up 0.1 percent in March.
Inventory investment subtracted 1.07 percentage points from GDP in the first quarter, helping to restrict economic growth to a 1.2 percent annualized pace. Inventories had contributed to GDP growth for the two previous quarters.
Business sales were unchanged in April after slipping 0.1 percent in March. At April’s sales pace, it would take 1.37 months for businesses to clear shelves, unchanged from March.
Reporting by Lucia Mutikani; Editing by Andrea Ricci