Business Inventories Rise In U.S.

Inventories Rose By 0.4% To $1.575 Trillion

Business Inventories Rise In U.S.A new Commerce Department report shows U.S. companies increased inventories in April, even as sales slowed amid stagnant wages and the struggling economies of Europe. Inventories rose by 0.4% to $1.575 trillion, the Commerce Department reported, modestly beating the forecasts of economists. The gains were fueled by auto dealers as well as the restocking of building materials and furniture. Overall sales, meanwhile, improved by 0.2% to $1.25 trillion, while retail sales declined in consecutive months for the first time since 2010.

The increase in April inventories followed a 0.3% rise in March, data showed, but factory inventories – a large measure of U.S. stockpiles – were unchanged. At the current pace of business, companies had enough goods in their possession to last 1.26 months, similar to figures from March. Economists believe, at the present rate, it would take five months for companies to exhaust existing inventories, suggesting businesses will continue to restock to meet demand. That may lead to increased economic growth in the second quarter, especially if consumer confidence rebounds, analysts say.

The U.S. economy grew at a 1.9% rate in the first quarter, slipping from the 3% expansion reported in the final three quarters of 2011. By comparison, for all of 2010, U.S. GDP rose 1.7%. Economists are predicting second-quarter 2012 growth to be roughly 1.8%, a number dependent on several factors, including gas prices and the stability of the euro.