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US Wholesale Inventories Rise 0.5 percent in February

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US Wholesale Inventories Rise 0.5 percent in February

US wholesale inventories rose at a slower pace in February, supporting expectations for a softer GDP reading in the first quarter.

Wholesale inventories rose 0.5 percent in February, following a revised gain of 0.8 percent the prior month, the Commerce Department reported today in Washington. Economists in a Reuters poll expected wholesale stocks to increase 0.5 percent.

Farm inventories, which declined 0.9 percent at the beginning of the year, rebounded 2.7 percent in February, official data showed.

Wholesale inventories increased 3.9 percent in all of 2013. While the monthly figure isn’t considered a market mover, it’s a key component of gross domestic product, as wholesale stocks excluding automobiles are factored into the calculation of national GDP.

The US economy expanded at an annualized rate of 2.6 percent in the fourth quarter, revised downward from 3.2 percent. First quarter growth could come in as low as 0.6 percent, according to some market voices. Harsh winter disrupted activity across vital sectors of the US economy, including durable goods and housing. This in turn led to a marked increase in hiring in December and January.

Although the US economy started slowly this year, it is expected to anchor global recovery in 2014 and 2015. The US economy is expected to grow 2.8 percent this year and 3 percent in 2015, according to the International Monetary Fund.

The Commerce Department is scheduled to release first quarter GDP data at the end of the month.

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