Business inventories indeed have started to increase, but the rate of accumulation has been modest. April inventories posted a 0.4% increase and it was the sixth gain in seven months. The rise was enough to slow the y/y rate of decumulation to 2.8% from -14.3% last summer, but the value of inventories remained down 12.5% from the 2008 peak. Moreover, the increases have not kept up with the improvement in sales and the I/S ratio remained at its historic low of 1.23.

Retail inventories have started to rise and the 0.2% April uptick was the fifth modest increase following sharp declines during 2008 & 2009. Nevertheless, the level of inventories remained 13.6% below the 2008 peak. Accumulation this year owes to modest gains in the auto sector. Less autos, accumulation began only in March and it's been slight. Year-to-year inventories still are down 1.3% versus the peak decumulation rate of 7.7% last fall. The slowdown has been led by furniture & general merchandise stores while the decline in apparel store inventories has finally abated to -6.7% y/y.

Inventory accumulation in the factory sector compares with sharp decumulation through most of 2009. It has been accompanied by higher wholesale inventories, but here the improvement has been raised by higher oil prices. Less oil, wholesale inventories have been virtually flat for all of this year (-5.7% y/y).

The business sales and inventory data are available in Haver's USECON database.