WASHINGTON – U.S. business inventories (search) rose 0.5 percent in February, matching analyst expectations, while sales posted their largest drop in nearly two years, government data showed Thursday.
The Commerce Department (search) said stocks at manufacturers, retailers and merchant wholesalers grew for a fifth consecutive month to a seasonally adjusted $1.288 trillion.
Business sales fell 0.4 percent in February to $980.82 billion, the biggest monthly decrease since a 1.6 percent fall in April 2003.
Wall Street analysts polled by Reuters had forecast the 0.5 percent inventory gain.
Rising inventories can signal either improved business confidence in future demand or an unexpected sales drop that has prompted involuntary stock-building.
Stocks remained relatively lean in February by historical standards. The inventory-to-sales ratio, which measures the number of months needed to deplete stocks at the current sales pace, rose to 1.31 months from a record low 1.30 months in January.
Within the report, retail inventories rose 0.3 percent in February after a matching 0.3 percent January climb, while sales were up 0.4 percent.
Excluding cars and parts, retail stocks grew 0.4 percent.
Manufacturers' stocks rose 0.5 percent in February, slowing from a 1.5 percent expansion the month before. Manufacturing sales fell 0.9 percent.
In a report issued last week, the Commerce Department said inventories at merchant wholesalers rose 0.6 percent in February while wholesale sales fell 0.4 percent.