WASHINGTON (Reuters) -U.S. business inventories rose less than expected in March as robust sales growth at retailers depleted stocks there.
Inventories gained 0.1% after rising 0.2% in February, the Commerce Department’s Census Bureau said on Thursday. Economists polled by Reuters had forecast inventories, a key component of gross domestic product, increasing 0.2%.
Inventories rose 2.5% year-on-year in March. Inventories are the most volatile component of GDP.
Businesses front-loaded imports in the first quarter, seeking to avoid President Donald Trump’s sweeping duties on foreign goods, resulting in a large trade deficit. Most of the imports ended up as inventory at wholesalers.
The government’s advance gross domestic product estimate for the first quarter published last month estimated that business inventories increased at a $140.1 billion annualized rate after rising at only a $8.9 billion pace in the October-December quarter.
Inventories added 2.25 percentage points to GDP, the most since the fourth quarter of 2021. The contribution was, however, outpaced by a record 4.83 percentage points drag from the wider trade deficit, resulting in GDP contracting at a 0.3% rate last quarter – the first contraction in three years.
Retail inventories fell 0.2% instead of 0.1% as estimated in an advance report published last month. They dipped 0.1% in February. Motor vehicle inventories dropped 1.3% rather than 1.1% as previously reported. They fell 0.6% in February.
Retail inventories excluding autos, which go into the calculation of GDP, advanced 0.4%. Wholesale inventories rose 0.4% in March, while stocks at manufacturers edged up 0.1%.
Business sales rose 0.7% after advancing 1.0% in February. Sales at retailers surged 1.5%.
At March’s sales pace, it would take 1.34 months for businesses to clear shelves, down from 1.35 months in February.
(Reporting by Lucia Mutikani)
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