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U.S. Business Inventories Rise In Line With Estimates In May
(RTTNews) - The Commerce Department released a report on Tuesday showing another modest increase in U.S. business inventories in the month of May.
The report said business inventories rose by 0.2 percent in May after inching up by a downwardly revised 0.1 percent in April.
Economists had expected business inventories to edge up by 0.2 percent, matching the uptick originally reported for the previous month.
The modest increase in business inventories came as a 0.7 percent advance by retail inventories was partly offset by a 0.2 percent dip in manufacturing inventories. Wholesale inventories were unchanged.
"A broad-based pullback in inventories has yet to occur, with consumer spending propelling the economy forward," said Matthew Martin, U.S. Economist at Oxford Economics. "However, recent gains have been sluggish relative to the prior year."
He added, "We still expect a sharp downturn in stock accumulation in H2 2023 as elevated interest rates, which raise the cost of keeping inventory, and slowing consumer appetites weigh on inventories."
The Commerce Department said business sales also rose by 0.2 percent in May after edging down by 0.1 percent in April.
Retail and manufacturing sales climbed by 0.4 percent and 0.3 percent, respectively, while wholesale sales slipped by 0.2 percent.
With inventories and sales both showing modest increases, the business inventories/sales ratio was unchanged from the previous month at 1.40.
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