U.S. business inventories fall in April; sales rise

American Business Bank

15/06/2021 15:20

WASHINGTON, June 15 (Reuters) - U.S. business inventories
fell in April, with stocks declining at a sharper pace than
initially estimated amid shortages of raw materials, which are
undercutting production of motor vehicles and other goods.
    Business inventories decreased 0.2% after increasing 0.2% in
March, the Commerce Department said on Tuesday. Inventories are
a key component of gross domestic product. Economists polled by
Reuters had forecast inventories dipping 0.1%.
    Inventories dropped 3.6% on a year-on-year basis in April.
    Retail inventories decreased 1.8% in April, rather than 1.6%
as estimated in an advance report published last month. That
followed a 1.4% decrease in March. Motor vehicle inventories
dropped 7.5% rather than 7.0% as estimated in an advance report
published last month. Motor vehicle stocks are being run down as
a global semiconductor shortage weighs on auto production.
    Retail inventories excluding autos, which go into the
calculation of GDP, increased 0.6% instead of 0.5% as estimated
last month.
    Manufacturers are battling shortages of raw materials and
labor in the wake of pent-up demand unleashed by the reopening
of the economy as vaccinations ease COVID-19's intensity.
    With demand robust, inventories were depleted in the first
quarter. The inventory drawdown subtracted nearly three
percentage points from GDP growth last quarter. Still, the
economy grew at a strong 6.4% annualized rate after expanding at
a 4.3% pace in the fourth quarter. Most economists are
forecasting double-digit GDP growth in the second quarter. 
    Wholesale inventories increased 0.8% in April. Stocks at
manufacturers rose 0.3%.
    Business sales advanced 0.6% in April after rebounding 5.8%
in March. At April's sales pace, it would take 1.25 months for
businesses to clear shelves, down from 1.26 months in March.

 (Reporting by Lucia Mutikani
Editing by Chizu Nomiyama)
 ((Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters
Messaging: lucia.mutikani.thomsonreuters.com@reuters.net))