WASHINGTON (Reuters) - U.S. business inventories increased moderately in March, likely restrained by shortages of raw materials, which have weighed on the production of motor vehicles and other goods.
Business inventories rose 0.3% after increasing 0.6% in February, the Commerce Department said on Friday. Inventories are a key component of gross domestic product. March's gain was in line with economists' expectations.
Inventories were unchanged on a year-on-year basis in March.
Retail inventories decreased 1.4% in March as estimated in an advance report published last month. That followed a 0.1% gain in February.
Motor vehicle inventories plunged 6.1% as previously reported. Motor vehicle stocks are dwindling as a global semiconductor shortage weighs on auto production.
Retail inventories excluding autos, which go into the calculation of GDP, increased 0.6% as estimated last month.
Business inventories were depleted in the first quarter amid a burst in domestic demand, fueled by a reopening economy and massive fiscal stimulus. Inputs shortages at factories as well as a scarcity of workers at ports to offload imported consumer goods could make it difficult for businesses to rebuild stock.
The inventory drawdown subtracted 2.64 percentage points from GDP growth last quarter. Still, the economy grew at a robust 6.4% annualized rate in the March-January period after expanding at a 4.3% pace in the fourth quarter.
Wholesale inventories rose 1.3% in March. Stocks at manufacturers gained 0.7%.
Business sales rebounded 5.7% in March after dropping 1.6% in February. At March's sales pace, it would take 1.23 months for businesses to clear shelves, down from 1.30 months in February.