Economic Buzz: US business inventories rise 0.5% in April

U.S. business inventories increased strongly in April, indicating that inventory investment could help boost economic growth in the second quarter.

According to the Commerce Department?s Census Bureau, inventories rose 0.5% in April after increasing 1.0% in March. Compared with a year earlier, inventories were up 2.7% in April.

Inventories had been reduced for four consecutive quarters and had an almost neutral effect on the economy?s 1.6% annualized growth rate in the first quarter.

Retail inventories rose 0.7% in April, in line with the estimate released last month, following a 0.8% increase in March. Motor vehicle inventories increased 0.8%, revised down slightly from the previously reported 0.9%, after rising 1.2% in March.

Retail inventories excluding automobiles, a component used in GDP calculations, increased 0.6% in April, matching last month?s estimate and the gain recorded in March.

Wholesale inventories climbed 0.6% in April, while inventories held by manufacturers increased 0.3%.

Business sales rose 1.2% in April after surging 2.2% in March. At April?s sales pace, businesses would take 1.31 months to clear inventories, down from 1.32 months in March. The inventories-to-sales ratio stood at 1.38 months in April 2025.

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