WASHINGTON (Reuters) – U.S. business inventories increased strongly in April amid a moderation in sales, government data showed on Wednesday.
Business inventories rose 1.2% after advancing 2.4% in March, the Commerce Department said. Inventories are a key component of gross domestic product. April’s increase was in line with economists’ expectations. Inventories advanced 16.6% on a year-on-year basis in April.
Retail inventories increased 0.7% in April as estimated in an advance report published last month. That followed a 3.1% jump in March. Motor vehicle inventories dropped 2.2% as estimated last month. They increased 1.7% in March.
Retail inventories excluding autos, which go into the calculation of GDP, advanced 1.7% as estimated last month.
Inventories are being closely watched amid rising fears of a recession next year as the Federal Reserve raises interest rates to cool demand in its battle against high inflation. Major U.S. retailers, including Walmart and Target, said last month that they were carrying too much merchandise.
Wholesale inventories increased 2.2% in April. Stocks at manufacturers gained 0.6%.
Business sales rose 0.4% in April after accelerating 1.6% in March. At April’s sales pace, it would take 1.29 months for businesses to clear shelves, up from 1.28 months in March.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
