US business inventories increase slightly above expectations in May
US BUSINESS inventories increased slightly more than expected in May amid solid rises in stocks at wholesalers and retailers, a trend that could see inventory investment contributing to economic growth in the second quarter.
Inventories rose 0.5 per cent after climbing 0.3 per cent in April, the Commerce Department’s Census Bureau said on Tuesday (Jul 16). Economists polled by Reuters had forecast inventories, a key component of gross domestic product, rising 0.4 per cent.
Inventories advanced 1.6 per cent year on year in May.
Private inventory investment has been a drag on GDP for two straight quarters as businesses carefully managed stocks and domestic demand remained strong. There is cautious optimism that inventory accumulation could offset some of the anticipated hit on GDP from a widening trade deficit.
Growth estimates for the second quarter are around a 2 per cent annualised rate. The economy grew at a 1.4 per cent pace in the January-to-March quarter. The government is scheduled to publish its snapshot of second-quarter GDP next week.
Retail inventories increased 0.6 per cent in May instead of 0.7 per cent as estimated in an advance report published last month. They rose 0.8 per cent in April. Motor vehicle inventories advanced 2.0 per cent as previously reported. They increased 1.9 per cent in April.
Retail inventories excluding autos, which go into the calculation of GDP, were unchanged as reported last month. They advanced 0.2 per cent in April.
Wholesale inventories increased 0.6 per cent in May, while stocks at manufacturers gained 0.2 per cent.
Business sales were unchanged in May after rising 0.2 per cent in April. At May’s sales pace, it would take 1.37 months for businesses to clear shelves, unchanged from April. REUTERS
Share with us your feedback on BT's products and services
