WASHINGTON (Reuters] – Although U.S. wholesale inventories increased in February more than was initially believed, the impact of inventory investments on economic growth during the first quarter is likely to have been negligible.

According to the Commerce Department, wholesale inventories increased 2.5% last Friday instead of 2.1% reported last month. Wholesaler stocks rose 1.2% in January. Reuters polled economists and found that they expected stocks to remain unchanged.

On a year-on, basis wholesale inventories grew 19.9% in February. The key component of the gross domestic product is inventory. After falling 2.3% in January, wholesale motor vehicle inventories rose 1.4%.

In February, wholesale inventories, which exclude autos, rose 2.6%. This part is included in the calculation of GDP.

The fourth quarter saw inventory investment rise at an impressive seasonally adjusted annualized rate $193.2 billion, which contributed 5.32 percentage points of the quarter’s 6.9% pace. Economists believe inventories can rise further, noting that inflation adjusted inventories are still below pre-pandemic levels. Low sales-to-inventory ratios also exist.

However, inventories did not provide a significant boost to GDP growth during the January-March quarter. They would need to grow at a faster pace than in the fourth quarter.

Companies are replenishing inventories after reducing inventory in the second quarter and third quarters of 2021. Most growth estimates for the first three quarters are below 1.0%.

After jumping 5.0% in January, wholesaler sales increased by 1.7% in February. Wholesalers would need 1.21 months to clear their shelves at February’s pace, up 1.20 months from January.