U.S. business inventories increase modestly in May
WASHINGTON (Reuters) - U.S. business inventories rose modestly in May, suggesting restocking will probably not contribute to economic growth in the second quarter.
The Commerce Department said on Tuesday business inventories rose 0.3 percent after an unrevised 0.4 percent increase in April.
The increase was in line with expectations.
Inventories are a key component of gross domestic product. Retail inventories excluding autos, which go into the calculation of GDP, edged up 0.1 percent in May.
April's retail inventories excluding autos were revised down to show them increasing 0.5 percent instead of 0.6 percent.
Inventories contributed 0.45 percentage point to GDP in the first quarter and economists do not expect restocking to add to output in the second quarter.
In May, business sales rose 0.4 percent after increasing 0.5 percent in April. At May's sales pace, it would take 1.36 months for businesses to clear shelves - a relatively high ratio that suggests limited scope for businesses to aggressively accumulate stocks. The ratio was unchanged from April.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
