Business Inventories Rise

Business inventories rose a sizable 0.4 percent in March but held in line with a 0.3 percent rise for sales, keeping the inventory-to-sales ratio unchanged at 1.41. Inventories at retailers jumped 1.0 percent in March but don't look out of line given this morning's 1.3 percent jump in April retail sales. Inventories at wholesalers and inventories at factories rose 0.1 and 0.2 percent in previously released data. The headline 0.4 percent gain looks heavy for a flat economy though the early indications for the second-quarter, namely the retail sales report, point to a pick up for the economy and perhaps the need to build inventories.

Recent History Of This Indicator:
Business inventories have been edging lower as businesses scramble to keep down unwanted stocks in a low sales environment. But a 0.2 percent gain is expected for March inventories which however, if not matched by a similar gain for sales, could increase concerns that overhang will hold down future production and employment.