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Nation/World

Business Inventories Increase During May

Tue., July 18, 1995

In a fresh sign that recession worries are receding, businesses added to their inventories in May at the slowest pace in five months. Analysts said a slower buildup in stockpiles likely will be matched by recovering sales.

The Commerce Department said Monday that inventories rose 0.4 percent in May, the 14th straight increase but less than half a revised gain of 1 percent for April. The last time they accumulated at a slower pace was in December, when they grew 0.3 percent.

“Businesses have done a good job gaining control over their inventories and they’ve done it quickly,” said Mark Zandi of Regional Financial Associates in West Chester, Pa., a forecasting service. “It’s more good news for the economy. The recession risks are very low.”

The May inventory report, in line with analysts’ predictions, suggests stockpiles are being trimmed to manageable levels as retailers reduce prices to speed up sales. The last time inventories fell was in March 1994, when they slipped 0.1 percent.



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