U.S. business inventories saw a moderate increase in May, matching revised growth figures for April that were slightly lower than initially reported.
The Commerce Department released a report Monday showing the total level of manufacturers and trade inventories at $1.5784 trillion in May, a 0.3 percent increase from April levels.
Meanwhile, the April figures, which had originally shown a 0.4 percent increase, were revised down to show 0.3 percent growth for the month.
The May increase was in line with the expectations of most economists and contributed to a 5.2 percent increase over May 2011 levels.
Overall business sales fell 0.1 percent in May, however, matching the 0.1 percent decline posted for April. Nevertheless, overall business sales remain up 5.1 percent from May 2011 levels.
The increase in inventories and the decrease in sales brought the inventories-to-sales ratio to 1.27, up slightly from the 1.26 level recorded in April.
Peter Boockvar, managing director at Miller Tabak, said, "In a reversal from Q1, inventories are growing faster than sales so far in Q2."
"The sales decline will obviously influence the personal spending GDP component negatively only partially offset by the rise in inventories," he added.
Much of the increase in business inventories came in the retail sector, which saw inventories rise 1 percent in May. That increase, in turn, was fueled by a 1.9 percent increase in motor vehicle and parts inventories.
Excluding motor vehicles, retail inventories increased 0.6 percent for the month.
Wholesale inventories were also up in May, rising 0.3 percent, while manufacturing inventories fell 0.2 percent.
by RTT Staff Writer
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