U.S. business inventories remains flat in March, likely to add to GDP growth in Q2

U.S. business inventories remained the same in March after recording a decent rise in sales. Total sales rose 0.5 percent, led by a 0.7 percent grown at retailers. Manufacturers and wholesalers saw inventory grown decelerate, while stockpiles at retailers outright fell. The inventory-to-sales ratio fell, continuing to unwind from the 2015-2016 weak patch. However, the I-S ratio continues to be slightly elevated, implying only modest stock building ahead, noted Wells Fargo in a research report.

Even if today’s data just runs through the first quarter, inventories are likely to positively contribute to growth again in the second quarter. The rebound in consumer spending, clear in today’s released retail sales report, and continued growth in investment spending should encourage business to add inventory, said Wells Fargo.

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