WASHINGTON — U.S. businesses increased their stockpiles in February by a modest amount while their sales slowed a bit.
Business inventories rose by a seasonally adjusted 0.3 per cent in February after an identical increase in January, the Commerce Department said Friday. And sales rose 0.2 per cent in February after a slightly faster 0.3 per cent increase in January.
An effort by businesses to rebuild their stockpiles had added a full percentage point to economic growth in the October-December quarter, a period when the economy grew by a tepid 2.1 per cent , as measured by the gross domestic product.
But many analysts say they believe growth slowed in the January-March quarter, in part because they think inventories subtracted from overall economic activity. Economists at JPMorgan Chase are forecasting annual GDP growth of just 1 per cent in the first quarter.
Businesses spent much of last year working to reduce an overhang of unsold goods, a process that imposed a drag on growth. But economists say that process is nearing an end and the absence of a drag from inventory reductions should mean stronger growth later in 2017.
For February, stockpiles held by manufacturers rose 0.2 per cent . They increased 0.4 per cent at the wholesale level and 0.3 per cent at retailers.
Martin Crutsinger, The Associated Press