Inventories held by U.S. businesses on shelves and backlots dropped by 0.1 percent in March, the biggest decline since July 2005, the Commerce Department reported Friday.
The drop came after a rise of 0.2 percent in February. Compared with the same period a year ago, business inventories were up 4.8 percent in March.
Data released by the department showed that the March drop was led by a 0.7 percent fall in stockpiles held by retailers. Retailers' inventories gained 0.2 percent in February.
The cutback came as retailers tried to get control of their stockpile in the face of a slowing economy, according to analysts.
Wholesalers' stockpiles increased by 0.3 percent in March, slightly down from a 0.4 percent gain in the previous month.
Meanwhile, stockpiles held by manufacturers climbed up by 0.2 percent. They were flat in February.
For March, U.S. business sales were up 1.4 percent, up from a 0. 3 percent increase in the previous month.
The total business inventories-to-sales ratio at the end of March was 1.27, down from 1.29 in February. The ratio is a measure of how long it would take to deplete stocks at the current sales pace.