Business Inventories Rise, While Sales Are Strong

U.S. business inventories rose 0.5 percent in April, more than expected, while sales were their strongest since November, a government report showed.

Inventories stood at a seasonally adjusted $1.47 trillion in April, the Commerce Department said.

Wall Street analysts were expecting a 0.3 percent gain in April, after a 0.2 percent rise in March previously reported as a 0.1 percent increase.

Retailer increased their stocks by 0.4 percent in April, after a 0.6 percent drop in March, in a sign they may be expecting stronger consumer spending.

Earlier on Thursday, the department reported retail sales in May rose 1 percent, much higher than expected. Analysts said rebates from the government stimulus package boosted sales at retailers.

The rise in inventories could cause economists to increase forecasts for second-quarter gross domestic product.

April business sales rose 1.4 percent, the best showing since a 1.9 percent rise in November.

The stock-to-sales ratio, which measures how long it would take to empty inventories at the current pace, fell to 1.25 months in April from 1.26 months in March.

The April ratio was the lowest since 1.24 months in November.