Business sales and inventories were both up in March, according to a Commerce Department report (link opens as PDF) released today.

Seasonally adjusted sales grew 1% from February to reach $1,326 billion for the month. The largest percentage gain growers were retailers (+1.5%) and merchant wholesalers (+1.4%), while manufacturing increased just 0.3%. From today's lackluster April retail report, however, it seems that strong sales might not be here to stay.

A 6.5% year-over-year boost in merchant wholesalers sales in March provided the primary push behind a 4.3% rise in total business sales when comparing March 2014 to March 2013. Manufacturing was up just 2.6% in the same period.

As March sales soared, inventories increased a seasonally adjusted 0.4% to $1,717 billion. Analysts were almost spot-on, having predicted a 0.5% rise. Merchant wholesalers proved to be the big inventory builders for March, expanding 1.1% as retailers flatlined and manufacturers edged up just 0.1%. Overall inventories were up 4.7% year over year in March.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories expanded relatively similar amounts from February to March, the inventories/sales ratio stayed steady at 1.30. The March 2013 ratio was 1.29.



Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Compare Brokers