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

Seasonally adjusted sales increased 0.4% to $1,343 billion for May. Retailers and merchant wholesalers both contributed to the gain, with sales up 0.4% and 0.7%, respectively. Manufacturers lagged, recording a slight 0.1% bump for the same period. A similar pattern holds true for the past 12 months. While manufacturers have managed a 2.9% increase in sales, retailers notched 4.5% growth, and merchant wholesalers laid claim to a sizable 6.6% boost. 

As sales headed higher for May, so did inventories, expanding a seasonally adjusted 0.5% to $1,737 billion. With inventories, at least, manufacturers seem to be expecting solid sales ahead. Manufacturer inventories expanded 0.8%, more than both retailers (0.2%) and merchant wholesalers (0.5%). In the last year, overall inventories are up 5.6%.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories both expanded at relatively similar rates, the inventories/sales ratio remained steady at 1.29. In May 2013, the ratio stood at a slightly smaller 1.28. 



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.