U.S. businesses increased their inventories in April by the largest amount in six months, the government reported Thursday, signaling business optimism that future demand will keep rising.
The Commerce Department said business inventories rose 0.6 percent in April following a 0.4 percent advance the previous month. It was the 11th consecutive increase in inventories and was the biggest gain since last October.
Total business sales rose 0.7 percent in April after a 1.1 percent surge the previous month, which had been the biggest sales increase in 10 months.
The solid sales gains are expected to prompt businesses to keep ordering more goods to restock their inventories. Such rising demand will increase factory production and support stronger overall economic growth. A strong rebound in gross domestic product (GDP) is expected in the April-June quarter.