Inventories at U.S. companies rose less than forecast in February, depressed by a drop among retailers as sales improved.
The 0.5-percent increase in stockpiles followed a revised 1-percent gain in January that was larger than initially estimated, the Commerce Department said. Economists projected a 0.8-percent rise, according to the median estimate in a Bloomberg News survey. Sales increased 0.2 percent.
Companies are replenishing inventories as a pickup in employment helps sustain consumer spending. The amount of goods on hand at retailers compared to sales dropped to the lowest level on record, indicating merchants will be placing more orders to rebuild stocks, contributing to growth and helping keep manufacturing as the expansion's frontrunner.
"The level of inventories is still exceedingly low given the pace of sales, so inventory growth should continue to be strong," Robert Stein, a senior economist at First Trust Portfolios in Wheaton, Illinois, said before the report. "Inventories should be a net positive for growth."
