Business inventories rise to 8-month high in March

WASHINGTON (Reuters) - U.S. business inventories increased in March to their highest level in eight months as businesses restocked warehouses to meet rising domestic demand, while sales were the strongest since November, a government report showed on Friday.

The Commerce Department said inventories rose 0.4 percent to $1.33 trillion after increasing by an unrevised 0.5 percent in February. The increase in March inventories was in line with market expectations.

Inventories are a key component of gross domestic product changes over the business cycle and rebuilding of stocks from record low levels is assisting the economic recovery.

Business sales jumped 2.3 percent to $1.07 trillion in March, the highest level since October 2008, following a 0.6 percent increase in February.

That left the inventory-to-sales-ratio, which measures how long it would take to clear shelves at the current sales pace, at 1.24 months' worth, the lowest since a matching level in January 2006, compared with 1.27 months' worth in February.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)