Inventories Down, a Good Sign

Inventories declined 0.4% in May, the first drop in more than two years, the Census Bureau said today, a positive sign for the industrial economy that has been starving for new orders.

May inventories at the retail, manufacturing and wholesale level were worth $2.3 billion less than in April, while sales for the month inched up 0.2%. Increases in inventories in the past have discouraged new orders, especially when the gains occurred even as sales increased.