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Staff of Reuters Read for 2 minutes (Reuters) – WASHINGTON (Reuters) – In May, corporate inventories in the United States increased significantly, but shortages of commodities such as automobiles are making it difficult for retailers to resupply warehouses in order to satisfy soaring demand. Warehouse workers at an ABT Electronics facility in Glenview, Illinois, U.S., deal with merchandise stacked to the ceiling on December 4, 2018. The photo was taken on December 4, 2018. in order to match Insight USA -Richa Naidu/RETAILERS/TRADE REUTERS The Commerce Department said on Friday that business inventories increased by 0.5 percent in May after increasing by 0.1 percent in April. Inventories account up a significant portion of the gross domestic product. The gain in May was in line with economists’ forecasts. In May, inventories grew 4.5 percent year over year. According to an advance report released last month, retail inventories dipped 0.8 percent in May. This came after a 1.7 percent drop in April. Automobile inventory fell 5.5 percent, rather than the 5.3 percent predicted in a preliminary report released last month. A global semiconductor scarcity is putting a damper on vehicle production, causing stocks to deplete and used car and truck prices to skyrocket, driving up inflation. Retail inventories, excluding vehicles, which are used to calculate GDP, climbed 0.9 percent last month, according to estimates. Businesses are finding it difficult to replenish due to a lack of raw materials and labor. COVID- Since the pandemic began in the United States in March 2020, demand has been fueled by 19 immunizations, low interest rates, and roughly $6 trillion in government relief, straining the supply system. In the first quarter, inventories were decreased. In the January-March quarter, the inventory depletion reduced GDP growth by 2.7 percentage points. In the second quarter, most economists predict GDP growth of just around 10% on an annualized basis. After expanding at a 4.3 percent rate in the fourth quarter, the economy increased at a healthy 6.4 percent rate in the first three months of this year. In May, wholesale inventories increased by 1.3 percent. Manufacturers’ stocks rose by 0.9 percent. After growing 0.6 percent in April, business sales decreased 0.3 percent in May. Businesses would need 1.26 months to clean shelves at May’s sales pace, up from 1.25 months in April. Lucia Mutikani contributed reporting, and Raissa Kasolowsky edited the piece./nRead More

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