(Reuters) - U.S. business inventories rose steadily in May and sales recorded their biggest increase in eight months, government data showed on Monday.
The Commerce Department said business inventories increased 0.4 percent after an unrevised 0.3 percent gain in April. May’s rise in inventories, which are a key component of gross domestic product, was in line with economists’ expectations.
Retail inventories increased 0.4 percent in May as reported in an advance estimate published last month. Retail inventories rose 0.4 percent in April.
Motor vehicle inventories increased 0.9 percent in May and not 1.0 percent as reported last month. Auto inventories rose 0.8 percent in April.
Retail inventories excluding autos, which go into the calculation of GDP, edged up 0.1 percent in May as reported last month. They gained 0.2 percent in April.
Inventory investment was neutral to first-quarter economic growth. Economists expect a modest contribution from inventory accumulation to second-quarter growth.
Business sales jumped 1.4 percent in May, the biggest gain since September 2017, after increasing 0.6 percent in April.
At May’s sales pace, it would take 1.34 months for businesses to clear shelves. That was the smallest inventories/sales ratio since December 2014 and was down from 1.35 months in April.
Reporting by Lucia Mutikani; Editing by Andrea Ricci