U.S. business inventories rise in May; autos stocks decline
16/07/2021 15:18
WASHINGTON, July 16 (Reuters) - U.S. business inventories
increased solidly in May, but shortages of goods like motor
vehicles are making it harder for retailers to restock
warehouses to meet booming demand.
Business inventories rose 0.5% after edging up 0.1% in
April, the Commerce Department said on Friday. Inventories are a
key component of gross domestic product. May's increase was in
line with economists' expectations.
Inventories increased 4.5% on a year-on-year basis in May.
Retail inventories decreased fell 0.8% in May as estimated
in an advance report published last month. That followed a 1.7%
decrease in April.
Motor vehicle inventories decreased 5.5%, rather than 5.3%
as estimated in an advance report published last month. A global
semiconductor shortage is undercutting auto production, leading
to stocks being run down and prices of used car and trucks
soaring, boosting inflation.
Retail inventories excluding autos, which go into the
calculation of GDP, increased 0.9% as estimated last month.
Raw material and labor shortages are making it difficult for
businesses to restock. COVID-19 vaccinations, low interest rates
and nearly $6 trillion in government relief since the pandemic
started in the United States in March 2020 are fueling demand.,
straining the supply chain.
Inventories were depleted in the first quarter. The
inventory drawdown subtracted 2.7 points from GDP growth in the
January-March quarter. Most economists are forecasting GDP
growth just under a 10% annualized rate in the second quarter.
The economy grew at a strong 6.4% rate in first three months of
the year after expanding at a 4.3% pace in the fourth quarter.
Wholesale inventories rose 1.3% in May. Stocks at
manufacturers advanced 0.9%.
Business sales fell 0.3% in May after increasing 0.6% in
April. At May's sales pace, it would take 1.26 months for
businesses to clear shelves, up from 1.25 months in April.
(Reporting by Lucia Mutikani
Editing by Raissa Kasolowsky)
((Lucia.Mutikani@thomsonreuters.com; 1 202 898 8315; Reuters
Messaging: lucia.mutikani.thomsonreuters.com@reuters.net))