–Total Business Inventories Excluding Retail Auto Up Only 0.1%
–Retail Inventories Ex Auto Up 0.6%; Retail Categories Mostly Higher
–Business Sales Down 0.1% In May, Inventory/Sales Ratio Rise To 1.27

By Kevin Kastner

WASHINGTON (MNI) – The value of business inventories rose 0.3% to
another record high level in May, with retail inventories up 1.0% to add
to the wholesale inventory gain already announced due to sales declines
at both levels, data released Monday morning by the Commerce Department
showed.

Analysts in a Market News International survey had expected
business inventories to rise 0.2%.

Factory inventories were already reported down 0.2% in the month,
while wholesale inventories rose 0.3%.

Overall business inventories would have been up only 0.1% in May if
a surge in retail motor vehicle inventories was excluded, an MNI
calculation showed.

Retail motor vehicle inventories were up 1.9% in May despite the
fact that motor vehicle sales rose 0.8% that month. Retail motor vehicle
inventories also rose sharply in April, up 2.2% that month.

The remaining retail inventories categories combined for a 0.6%
increase in May. There were increases in every inventory category except
a 0.1% decline department store inventories.

An MNI calculation of retail inventories not included in the
published categories shows a 0.5% rise in May after holding steady in
the previous month.

Business sales fell 0.1% in May, with retail sales excluding food
services down 0.2% in the month. Wholesale sales were already reported
down 0.8%, while manufacturing shipments, which are equal to sales in
this report, rose 0.5%.

Despite the May seasonally adjusted decline, business sales were
still up sharply from a year ago, running 7.2% ahead of their May 2011
level before seasonal adjustment and up 5.1% after seasonal adjustment.

At the same time, May business inventories were 5.3% above their
year-ago levels before seasonal adjustment and up 5.2% after seasonal
adjustment.

In May, the inventory-to-sales ratio rose to 1.27 compared with
1.26 in April. The May ratio was unchanged from the 1.27 ratio in May
2011. Before seasonal adjustment, the ratio was 1.21 in May, down
sharply from 1.27 in April and below the unadjusted 1.23 ratio in May
2011.

** MNI Washington Bureau: 202-371-2121 **

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