WASHINGTON, July 15 (UPI) -- The U.S. Commerce Department said Thursday businesses increased their stockpiles in May, but inventory growth failed to keep pace with rising demand.
Inventories rose 0.4 percent to a seasonally adjusted $1.219 trillion, after rising a revised 0.7 percent in April.
Wall Street economists were expecting inventories to rise 0.5 percent.
Inventories have been on the rise this year -- but so has demand.
Inventories climbed by 4 percent from May 2003 to May 2004, with business sales up 12.3 percent.
The inventory-to-sales ratio remains at a historic low level. Businesses have been cautious about increasing stockpiles and quick to slow output when demand eases, experts said.
Commerce said business sales rose 0.7 percent in May after easing an unrevised 0.1 percent the previous month.
The inventory-to-sales ratio held at 1.30. The ratio, an indicator of how well firms are matching supply with demand, measures how long it would take for a firm to sell all of its current inventory.
Retail inventories were flat in May, after rising 1.3 percent the month before. Auto inventories fell 1.2 percent. Excluding the auto component, retail inventories would have gone up 0.6 percent.
