US businesses increase inventories by a modest 0.3 percent

In this Friday, March 17, 2017, photo, Patricia Crawford shops for Atlanta Falcons and University of Georgia clothing at a J.C. Penney store in the Georgia Square Mall in Athens, Ga. On Friday, April 14, 2017, the Commerce Department reports on business stockpiles in February. (John Roark/Athens Banner-Herald via AP) In this Friday, March 17, 2017, photo, Patricia Crawford shops for Atlanta Falcons and University of Georgia clothing at a J.C. Penney store in the Georgia Square Mall in Athens, Ga. On Friday, April 14, 2017, the Commerce Department reports on business stockpiles in February. (John Roark/Athens Banner-Herald via AP)

By Associated Press April 14, 2017 1 min read

WASHINGTON (AP) – U.S. businesses increased their stockpiles in February by a modest amount while their sales slowed a bit.

Business inventories rose by a seasonally adjusted 0.3 percent in February after an identical increase in January, the Commerce Department said Friday. And sales rose 0.2 percent in February after a slightly faster 0.3 percent increase in January.

An effort by businesses to rebuild their stockpiles had added a full percentage point to economic growth in the October-December quarter, a period when the economy grew by a tepid 2.1 percent, as measured by the gross domestic product.

But many analysts say they believe growth slowed in the January-March quarter, in part because they think inventories subtracted from overall economic activity. Economists at JPMorgan Chase are forecasting annual GDP growth of just 1 percent in the first quarter.

Businesses spent much of last year working to reduce an overhang of unsold goods, a process that imposed a drag on growth. But economists say that process is nearing an end and the absence of a drag from inventory reductions should mean stronger growth later in 2017.