US Business Inventories Flat Again, Miss Forecast
U.S. business inventories were unchanged in March for a second straight month as automobile, furniture and clothing stocks fell, according to a government report on Monday that suggested restocking could be a boost to second-quarter growth.
Economists polled by Reuters had expected inventories to rise 0.3 percent.
The Commerce Department said automobile inventories fell 0.3 percent, the largest drop since February 2011, after declining 0.2 percent in February.
Inventories are a key component of gross domestic product changes. Retail inventories, excluding autos—which go into the calculation of GDP—fell 0.6 percent. That was the most since September 2009 and followed a 0.4 percent rise in February.
The decline in inventories excluding autos suggests that the government could lower its initial first-quarter GDP estimate when it publishes its revision later this month. However, the lack of inventory accumulation bodes well for second-quarter GDP growth.
Inventories added 1 percentage point to first-quarter GDP, helping to lift economic growth to a 2.5 percent rate in the January to March period.
Business sales fell 1.1 percent in March, the largest decline since June. At March's weak sales pace, it would take 1.29 months for businesses to clear shelves. That was up from 1.28 months in February.