Total business inventories increased 0.4% (4.4% y/y) during May following a 0.3% April increase. Total business sales strengthened 1.4% (8.6% y/y), following a 0.6% gain. The inventory-to-sales ratio slipped to 1.34. It peaked early in 2016 at 1.43.

Retail inventories increased 0.4% (2.2% y/y) in May, the same as during April. Auto inventories grew 0.9% (1.9% y/y) after a 0.8% rise. Non-auto retail inventories edged 0.1% higher (2.4% y/y) following a 0.2% increase. General merchandise inventories rose 0.3% (0.9% y/y) after a 1.0% surge. In the department store sector, inventories edged 0.2% higher (-3.2% y/y) following a 0.7% rise. Building materials inventories gained 0.7% (6.1% y/y) after a 0.6% increase, while clothing store inventories fell 0.7% (-0.8% y/y), down for the third straight month. Inventories of furniture, electronics and appliances declined 0.9% (-0.7% y/y), the fourth decline this year. As reported last week, wholesale inventories increased 0.6% (5.9% y/y) following a 0.1% uptick. Factory sector inventories rose 0.2% (5.2% y/y) following a 0.4% gain.

Retail sales increased 1.1% in May (6.5% y/y) with non-auto sales up 1.2% (7.1% y/y) after a 0.5% rise. Wholesale sector sales increased 2.5% (11.8% y/y) after improving 1.4%. Shipments from the factory sector rose 0.6% (7.3% y/y) following a 0.1% uptick.

The inventory-to-sales (I/S) ratio in the retail sector slipped to 1.43 in May, down sharply from the levels averaged during the prior two years. The non-auto I/S ratio declined to 1.20, its lowest level since early-2012. The ratio peaked at 1.29 early in 2016. The wholesale sector I/S ratio fell sharply to 1.24, its lowest level since November 2014. The manufacturing sector I/S ratio held steady for the third month at 1.35, its lowest point in three years.

The manufacturing and trade data are in Haver's USECON database.