U.S. business inventories increased slightly more than expected in March, lifted by a jump in motor vehicle stocks, government data showed on Tuesday.
Business inventories rose 2.0% after increasing 1.8% in February, the Commerce Department said. Inventories are a key component of gross domestic product. Economists polled by Reuters had forecast inventories rising 1.9%.
Inventories surged 14.7% on a year-on-year basis in March. Retail inventories increased 2.3% in March, instead of 2.0% as estimated in an advance report published last month. That followed a 1.6% increase in February.
Motor vehicle inventories rose 1.6% instead of 1.2% as estimated last month. They increased 1.4% in February. Retail inventories excluding autos, which go into the calculation of GDP, shot up 2.5%, rather than 2.3% as estimated last month.
Inventory investment slowed in the first quarter from the October-December period's robust pace. That, together with a record trade deficit, weighed on gross domestic product, resulting in the economy contracting at a 1.4% annualized rate in the first quarter.
Wholesale inventories increased 2.3% in March. Stocks at manufacturers gained 1.3%.
Business sales rose 1.8% in March after climbing 1.2% in February. At March's sales pace, it would take 1.27 months for businesses to clear shelves, unchanged from February
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