Wholesale inventories rise, sales fall in May
Wholesales sales fell unexpectedly for the first time in more than a year, lifting inventories to their highest level in 11 months, a government report showed on Friday.
Total wholesale inventories rose 0.5 percent to $398.81 billion, the Commerce Department said, following a revised 0.2 percent gain in April.
Economists polled by Reuters had expected stocks of unsold goods at U.S. wholesalers to rise 0.4 percent in May from a previously reported 0.4 percent increase. Compared to May last year, inventories were down 2.1 percent.
Inventory rebuilding from record low levels has been one of the key drivers of the economy's recovery from the worst recession since the 1930s.
Business inventories contributed 1.9 percentage points to growth in the first quarter, but their influence is expected to fade later in the year, which could significantly slow the recovery as consumer spending shows signs of cooling.
Sales at wholesalers fell 0.3 percent to $350.65 billion in May. The decline in sales was the first since March 2009. Sales rose by an upwardly revised 0.9 percent in April, which was previously reported as a 0.7 percent increase.
In the 12 months to May, sales were up 15.1 percent.
Analysts had expected sales at wholesalers to rise 0.5 percent in May. Sales in May were pulled down by a 1 percent drop in purchases of nondurable goods.
The weak sales lifted the inventory-to-sales ratio, a measure of how long it would take to sell stocks at the current sales pace, to 1.14 months' worth from April's 1.13 months, the Commerce Department said.
The ratio had steadily declined from a peak above 1.40 month's worth at the beginning of 2009.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)
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