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WASHINGTON, (Reuters) - U.S. business inventories increased in January as motor vehicle stocks recorded their biggest gain in nearly 6-1/2 years amid declining sales.
The Commerce Department said on Wednesday business inventories rose 0.3 percent after an unrevised 0.4 percent
increase in December.
Inventories are a key component of gross domestic product.
Retail inventories increased 0.8 percent in January as reported in an advance report published last month. Retail inventories were unchanged in December.
Motor vehicle inventories jumped 2.4 percent, the largest rise since August 2010, after falling 0.7 percent the prior month. Sales of motor vehicles fell 1.3 percent in January after rising 3.1 percent in December.
Retail inventories excluding autos, which go into the calculation of GDP, were unchanged as reported last month. That followed a 0.3 percent increase in December.
January's unchanged reading in retail inventories excluding autos suggests inventory investment will probably not provide a huge boost to GDP growth in the first quarter.
Inventory investment added one percentage point to the economy's 1.9 percent annualized growth rate in the fourth quarter. That was the second straight quarterly contribution to GDP growth after a drag that lasted more than a year.
The Atlanta Federal Reserve is forecasting GDP increasing at a 1.2 percent rate in the first quarter.
Business sales rose 0.2 percent in January after increasing 2.1 percent in December. At January's sales pace, it would take 1.35 months for businesses to clear shelves, unchanged from December.
Reporting by Lucia Mutikani; Editing by Andrea Ricci