U.S. business inventories up, retail stocks rise modestly
WASHINGTON (Reuters) - U.S. business inventories rose in May, suggesting restocking will still be a boost to growth in the second quarter even as stocks at non-automobile retailers rose marginally.
The Commerce Department said on Tuesday inventories increased 0.5 percent after rising 0.6 percent in April.
Economists polled by Reuters had forecast inventories, which are a key component of gross domestic product changes, rising 0.6 percent in May. Retail inventories, excluding autos, which go into the calculation of GDP, edged up 0.1 percent after a similar gain in April.
A sharp slowdown in the pace of inventory accumulation helped to weigh down on the economy, which contracted at a 2.9 percent annual pace in the first quarter.
Inventories subtracted 1.7 percentage points from GDP and a swing in restocking is expected to raise growth above a 3.0 percent pace in the second quarter.
Data already released has shown a steady increase in wholesale inventories and a jump in stocks at manufacturers.
Business sales rose 0.4 percent in May after advancing 0.8 percent in April. At May's sales pace, it would take 1.29 months for businesses to clear shelves, unchanged from April.
(Reporting by Lucia Mutikani; Editing by Meredith Mazzilli)