U.S. business inventories rise in March on jump in auto stocks

Automobiles are shown for sale at a car dealership in Carlsbad, California

WASHINGTON – U.S. business inventories rose in March as declining sales of motor vehicles continued to boost stocks, government data showed on Friday.

The Commerce Department said business inventories increased 0.2 percent after a similar gain in February.

Inventories are a key component of gross domestic product.

Retail inventories increased 0.5 percent in March instead of the 0.4 percent increase reported in an advance report published last month. Retail inventories rose 0.3 percent in February.

Motor vehicle inventories increased 0.9 percent after jumping 1.0 percent in the prior month amid declining sales.

Retail inventories excluding autos, which go into the calculation of gross domestic product, increased 0.3 percent instead of the 0.2 percent increase reported last month.

They fell 0.1 percent in February.

Inventory investment subtracted 0.93 percentage point from GDP in the first quarter, helping to hold down economic growth to a 0.7 percent annualized pace, the weakest performance in three years.

Inventories had contributed to GDP growth for the two previous quarters.

Business sales were unchanged in March after rising 0.2 percent in February.

At March’s sales pace, it would take 1.35 months for businesses to clear shelves, unchanged from February.

((Reporting by Lucia Mutikani; Editing by Paul Simao))