US Business Inventories Rise 0.4 Percent in February
US business inventories rose 0.4 percent in February led by a recovery in wholesale stocks. Total business sales increased 1.7 percent during the same period.
Business inventories in the United States rose slightly more than anticipated in February, driven by a significant recovery in wholesale stocks. This development suggests that inventory investment could provide a boost to economic growth for the first quarter of the year. According to the Census Bureau of the Commerce Department, inventories increased by 0.4% following a flat reading in January. This figure surpassed the 0.3% growth projected by economists in a Reuters poll. On a year-over-year basis, inventories were up 1.3% in February. The reporting marks a return to schedule for the indicator following previous delays caused by government shutdowns. Wholesale inventories led the gains with a 0.8% rebound, while retail inventories grew by 0.2%, a slight deceleration from the 0.3% rise seen in January. Manufacturing stocks saw a modest increase of 0.1%. Business inventories are a volatile but crucial component of Gross Domestic Product (GDP). In the fourth quarter, they contributed slightly to the 0.5% annualized growth rate. Currently, the Atlanta Federal Reserve projects a 1.3% GDP growth rate for the first quarter, following a robust 4.4% expansion in the third quarter of the previous year. Business sales experienced a sharp 1.7% jump in February, significantly higher than the 0.6% increase seen in January. Sales at retailers specifically rose by 0.7%. Given the current pace of sales, it would take businesses approximately 1.33 months to clear their shelves, down from 1.35 months in the preceding month.
