WASHINGTON — Business sales rose 1.7% in April, making their steepest gain since March, 1988, and far outpacing a 0.6% jump in inventories, the government said Wednesday.
Analysts expect sales to soften but say they see no sign of any dangerous buildup in stockpiles.
"We find very little evidence of any excess stocks, and I think that's good news for the economy because it lessens the risk of recession as we move forward," said economist Lawrence Chimerine of the WEFA Group in Bala-Cynwyd, Pa.
Rising inventories, if not accompanied by increased sales, could threaten a recession by prompting manufacturers to cut back production until excess stocks are sold.
But the ratio of inventories to sales dropped in April to 1.49, meaning that it would take 1.49 months to exhaust inventories at the April sales pace.