U.S. wholesale inventories fell at their fastest pace in nearly three years in February, pointing to a sharper slowdown in first-quarter economic growth than previously thought.
Wholesale inventories dropped 0.5 percent in February, the Commerce Department said Friday, the sharpest decline since May 2013. Analysts polled by Reuters expected a 0.1 percent decline.
The government also revised its reading for January to show a 0.2 percent decline in inventories rather than a 0.2 percent rise.
Inventories are a key component of gross domestic product changes. The component of wholesale inventories that goes into the calculation of GDP — wholesale stocks excluding autos — dropped 0.4 percent in February.
Weak economic growth in the first quarter of recent years has led many analysts to wonder if the government is having trouble making seasonal adjustments to its data. Weak inventories in the first three months of the year could lead to catch-up growth in the economy in the second quarter as companies restock their shelves.
Economists generally expect the economy grew at less than a 1 percent annual rate in the first quarter, down from a 1.4 percent rate in the last three months of 2015.
At February's sales pace, it would take 1.36 months to clear shelves, compared with 1.37 months in January.