WASHINGTON — U.S. wholesale inventories fell more than initially estimated in February and could shrink further as the novel coronavirus outbreak depresses imports.
The Commerce Department said on Thursday that wholesale inventories dropped 0.7% in February instead of declining 0.5% as reported last month. Stocks at wholesalers fell 0.6% in January. They declined 1.3% on a year-on-year basis in February.
The decline in inventories was across the board, with steep falls in automobile, furniture, computer equipment, farm products and petroleum.
The component of wholesale inventories that goes into the calculation of gross domestic product fell 0.5% in February.
Goods imports dropped to near a 2-1/2-year low in February, with merchandise from China the lowest since 2009, the government reported last week. The decline in imports could result in a drawing down of inventory, offsetting any contribution to GDP from a smaller trade deficit.
The pace of inventory accumulation accelerated from the third quarter of 2018 through the first quarter of 2019, before shifting lower from the second through the fourth quarters.
Inventory investment sliced off almost a full percentage point from GDP growth in the fourth quarter. The economy grew at a 2.1% annualized rate in the October-December period, matching the third quarter’s pace.
The economy is believed to have contracted sharply in the first-quarter as tough measures by states and local governments to control the spread of COVID-19, the respiratory illness caused by the coronavirus brought the country to a sudden top from mid-March.
Sales at wholesalers dropped 0.8% in February after increasing 1.3% in January. At February’s sales pace it would take wholesalers 1.31 months to clear shelves, unchanged from January. (Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)