- US wholesale inventories increased 0.5% in March, matching February's revised gain but falling short of analyst projections.
- The growth was driven by both durable and nondurable goods, while retail inventories unexpectedly declined 0.1%.
- The data comes alongside a widening trade deficit, suggesting mixed signals for the US economy.
Inventory Growth Meets Revised Estimates
US wholesale inventories rose 0.5% month-over-month to $908 billion in March, according to the latest Commerce Department data released Wednesday. The figure matched February's revised increase but fell slightly below market expectations of 0.6% to 0.7% growth.
The increase was broad-based, with durable goods inventories climbing 0.5% after a 0.4% February gain, while nondurable goods rose 0.4% - a slower pace than February's 0.7% increase. On an annual basis, wholesale inventories were up 2.3% from March 2024 levels.
Contrasting Retail Trends
While wholesale inventories expanded, retail inventories unexpectedly declined 0.1% to $805.8 billion in March. The February retail inventory change was revised downward from a preliminary estimate of +0.1% to -0.1%. Year-over-year, retail inventories remained up 4.8%.
"The divergence between wholesale and retail inventories suggests businesses are carefully managing stock levels amid uncertain demand signals," said one analyst who asked not to be named because they weren't authorized to speak publicly.
Trade Deficit Widens
The inventory data accompanied trade figures showing the US international trade deficit expanded to $162 billion in March, up $14.1 billion from February's $147.8 billion gap. Goods exports increased $2.2 billion to $180.8 billion, while goods imports rose more substantially by $16.3 billion to $342.7 billion.
Market participants will be watching for the next inventory report due May 30, which will provide April figures and potentially clearer signals about business inventory strategies moving forward.