WASHINGTON (Reuters) – U.S. wholesale inventories were revised lower in March to show them unchanged from the prior month, according to government data on Monday.
The Commerce Department had previously estimated wholesale inventories to have gained 0.1%. Stocks at wholesalers were also unchanged in February. Economists polled by Reuters had expected that inventories would be unrevised.
Inventories are a key part of gross domestic product. They increased 9.1% in March on a year-on-year basis.
Private inventory investment declined in the first quarter for the first time in 1-1/2 years, restricting GDP growth to a 1.1% annualized pace last quarter. The inventory drawdown reflected businesses reducing stock in anticipation of weaker demand later this year. Stronger consumer spending early in the first quarter also contributed to the inventory rundown.
Leaner inventories are potentially good news in the calculation of GDP for the second quarter. There had been fears that a correction of the inventory bloat would result in a sharper economic downturn. But the first-quarter decline led some economists to believe that much of the inventory liquidation was probably behind.
Wholesale motor vehicle inventories increased 1.5% after accelerating 2.0% in February. Excluding autos, wholesale inventories fell 0.2% in March. This component goes into the calculation of GDP.
Sales at wholesalers dropped 2.1% after rising 0.4% in February. At March’s sales pace it would take wholesalers 1.40 months to clear shelves, up from 1.37 months in February.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
