U.S. companies increased their inventories at a faster rate in April, despite only modest growth in sales, the government reported Wednesday. The Commerce Department said business inventories grew 0.4 percent in April, slightly better than the pace in March. Sales rose a modest 0.2 percent in April, matching the March increase. Inventories held by retailers and wholesalers both rose 0.6 percent. Inventories at the manufacturing level were unchanged. Total inventories rose to $1.58 trillion in April, 19.7 percent above the low reached in September 2009, a period when businesses were cutting inventories in response to the deep recession. The April data suggest businesses will keep restocking to meet demand, which should help overall economic growth in the April-June quarter. When businesses increase restocking, they order more goods, leading to higher factory production and stronger economic growth. Slower growth in inventories limited overall economic growth in the January-March quarter, when the economy grew at an annual rate of 1.9 percent.
