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May 8, 2024 – 7:24 AM PDT
WASHINGTON (Reuters) – U.S. wholesale inventories fell in March, confirming that inventory investment was a drag on economic growth in the first quarter.
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The Commerce Department’s Census Bureau said on Wednesday that wholesale inventories fell 0.4% as estimated last month. Stocks at wholesalers rebounded 0.2% in February.
Economists polled by Reuters had expected that inventories, a key part of gross domestic product, would be unrevised. Inventories dropped 2.3% on a year-on-year basis in March.
Private inventory investment cut 0.35% percentage point from GDP growth in the first quarter, the government reported last month. It was the second straight quarter that inventories subtracted from GDP.
The economy grew at a 1.6% annualized rate in the January-March quarter, the slowest pace in nearly two years.
Wholesale motor vehicle inventories slipped 0.1%. There were decreases in wholesale stocks of metals, hardware, paper, medication as well as apparel, groceries, farm products and alcohol. But petroleum stocks increased as did those of lumber, furniture, machinery and computer equipment.
Excluding autos, wholesale inventories fell 0.5% in March. This component goes into the calculation of GDP.
Sales at wholesalers declined 1.3% in March after rising 2.0% in February. At March’s sales pace it would take wholesalers 1.35 months to clear shelves, up from 1.34 months in February.
Reporting by Lucia Mutikani; Editing by Paul Simao