US Business Inventories rose in line with projections, Import Prices continued to slip

Business Inventories in the United States registered a 0.3% increase during April to reach the seasonally adjusted 1.66 trillion USD. Preliminary estimates showed the exact figure. On the other hand, Retail Sales increased by a mere 0.1% during the same month. As a result, Inventories/Shipments ratio, which tracks the operational cycle of business, or how many days will it take for inventories to be utilized in the process, while the company maintains a given rate of sales, increased to 1.31 in April from 1.30 a month earlier. Business Inventories indicator was revised down to a 0.1% decrease during March, as previously estimates pointed no change.

Meanwhile, Import Price Index recorded third consecutive month of decline in May, which could be a signal that weak economic conditions worldwide maintained inflation at low levels. The index dropped by 0.6% during May, compared to a bit deeper drop in April, 0.7%. In annual terms, import prices decreased by 1.9%. Oil prices dropped by 2%, which contributed to these results. Prices of non-petrol products dipped by 0.3%, marking the largest drop since July 2012. Lower prices of imported goods can be favorable to consumers, as companies are able to reduce costs of commodity production, that are usually brought on the consumers themselves. With prices on lower levels, consumers will be encouraged to spend on a wider pallete of goods. The report also said that prices of imported goods ex automobiles declined by 0.3% in May, as that was the largest drop since October 2010.