Business Sales Boosted 1.1% for May

A boost in business sales outweighed inventory growth for May, according to a Commerce Department report (link opens as PDF) released today.

Seasonally adjusted sales increased 1.1%, to $1,284 billion, for April, providing a welcome rise after last month's revised 0% non-growth. Merchant wholesalers recorded the biggest gains, up 1.6% month over month. Manufacturers' sales clocked in at 1%, pushing themselves out of April's 0.7% dip. Retailers registered 0.7% gains but, according to a new report released today, June sales decreased to a disappointing 0.4% growth.

Inventories offer a fairly positive picture, increasing just 0.1%, to $1,657 billion. Analysts had expected no growth, but May's sales boost was more than enough to offset the relatively minor inventories increase. Merchant wholesalers managed to drop inventories 0.5%, while retailers rose 0.6%, and manufacturers remained constant.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales rose more than inventories from April to May, the inventories/sales ratio decreased to 1.29, compared to April's 1.30 value. The May 2012 ratio was 1.28.

Source: Census.gov

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