US business inventories rise moderately in February

WASHINGTON (Reuters) – U.S. business inventories rose moderately in February, suggesting that inventory investment could subtract from economic growth in the first quarter.

Business inventories increased 0.2% after falling 0.2% in January, the Commerce Department said on Friday. Economists polled by Reuters had expected inventories, a key component of gross domestic product, to rise 0.3%.

Inventories increased 9.1% on a year-on-year basis in February. Inventory accumulation surged in the fourth quarter, mostly reflecting an unwanted piling up of goods, as growth in consumer spending decelerated because of higher interest rates.

Retail inventories increased 0.7% instead of 0.8% as estimated in an advance report published last month. They were unchanged in January.

Motor vehicle inventories accelerated 1.6% instead of 1.9% as estimated last month. They rose 0.4% in January. Retail inventories excluding autos, which go into the calculation of GDP, gained 0.3% instead of 0.4% as estimated last month.

Inventories accounted for about half of the 2.6% annualized growth rate in GDP in the fourth quarter.

Wholesale inventories rose 0.1% in February. Stocks at manufacturers fell 0.1%.

Business sales were unchanged in February after rebounding 1.2% in January. At February’s sales pace, it would take 1.36 months for businesses to clear shelves, unchanged from January.

(Reporting by Lucia Mutikani; Editing by Paul Simao)