Washington, DC, May 13—-Business inventories rose 0.4% in March, below expectations and slower than the 0.7% increase in sales, the Commerce Department said Friday.
As a result, the inventory-to-sales ratio, a closely watched measure of how fast merchandise is moving from the warehouse out the door, slipped to 1.31 in March from 1.32 in February.
Economists had been expecting the nation's inventories to rise 0.6% in March.
Economists said inventories could be slightly less of a boost to first quarter GDP growth than first thought.
The increase in March inventories is below the roughly 0.7% growth assumed by the Commerce Department in its preliminary first quarter GDP estimate of a 3.1% growth rate.
But a surprising decline in the March trade gap released on Wednesday would most likely lead to an upward revision to first quarter growth, economists said.
Much of the data in the report had already been released. One new piece of information: Retail inventories increased 0.3% in March, including a 0.4% rise in auto inventories, the biggest gain since November.
Excluding autos, retail inventories rose 0.3%.
In February, inventories rose 0.5% while sales fell 0.5%.
The figures are adjusted for seasonal factors but not for price changes.
Inventories at manufacturing firms grew 0.6% in March for the second straight month. Manufacturing sales rebounded to a 1.3% increase after falling 1.5% in the previous month. The inventory-to-sales ratio slipped to 1.25 from 1.26.
Inventories at wholesalers increased 0.4% while sales rose 0.2%. The inventory-to-sales ratio remained at 1.19.
