WASHINGTON- US wholesale inventories fell in March, confirming that inventory investment was a drag on economic growth in the first quarter.
The Commerce Department’s Census Bureau said on Wednesday that wholesale inventories fell 0.4 percent as estimated last month. Stocks at wholesalers rebounded 0.2 percent in February.
Economists polled by Reuters had expected that inventories, a key part of gross domestic product, would be unrevised. Inventories dropped 2.3 percent on a year-on-year basis in March.
Private inventory investment cut 0.35 percent 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 percent annualized rate in the January-March quarter, the slowest pace in nearly two years.
Wholesale motor vehicle inventories slipped 0.1 percent . 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 percent in March. This component goes into the calculation of GDP.
Sales at wholesalers declined 1.3 percent in March after rising 2.0 percent in February. At March’s sales pace it would take wholesalers 1.35 months to clear shelves, up from 1.34 months in February.
The US trade deficit narrowed slightly in March as a decline in imports was tempered somewhat by a plunge in exports.
The trade deficit contracted 0.1 percent to $69.4 billion, the Commerce Department’s Bureau of Economic Analysis said on Thursday. Data for February was revised to show the trade gap widening to $69.5 billion instead of $68.9 billion as previously reported. Economists polled by Reuters had forecast the deficit climbing to $69.1 billion in March.
Trade, through a surge in imports, was a large drag on gross domestic product in the first quarter. The economy grew at a 1.6 percent annualized rate last quarter after expanding at a 3.4 percent pace in the October-December period.
Imports dropped 1.6 percent in March to $327.0 billion. Goods imports fell 1.6 percent to $263.8 billion. There were decreases in imports of motor vehicles and parts as well as industrial supplies and materials, which include crude oil.
But imports of consumer goods increased $3.0 billion, boosted by pharmaceutical preparations. Capital goods imports were the highest on record. Services imports fell $1.1 billion to $63.2 billion, pulled down by transport and travel.
