INVENTORIES held by US businesses fell in May as stocks of unsold goods declined at manufacturing and wholesale levels, the Commerce Department said yesterday in Washington.

Total business inventories fell 0.1 per cent in May to a seasonally adjusted $983.3 billion (£618.4 billion) after a 0.4 per cent rise in April. The May decline in inventories matched Wall Street expectations of a 0.1 per cent drop.

Business sales in May rose 0.7 per cent to $717.4 billion after a revised 1.1 per cent increase in April. Business sales were previously reported up 1.0 per cent in April.

May manufacturers' inventories fell 0.2 per cent to $420.7 billion, wholesalers' inventories fell 0.2 per cent to $259 billion and retailers' inventories were about unchanged at $303.5 billion. Automotive inventories rose 0.2 per cent in May to $83.8 billion.

The inventory to sales ratio fell to 1.37 months' worth in May the lowest on record.