WASHINGTON, June 17 (Reuters) - U.S. business inventories increased strongly in April, suggesting that inventory investment could contribute to economic growth in the second quarter.

Inventories rose 0.5% after advancing 1.0% in March, the Commerce Department's Census Bureau said on Wednesday. The increase in inventories, a key component of gross domestic product and one of the most volatile, was in line with economists' expectations. They advanced 2.7% year-on-year in April. Inventories have been drawn down for four straight quarters, and almost had a neutral impact on the first quarter's 1.6% annualized growth rate.

Retail inventories increased 0.7% in April as estimated in an advance report last month. They rose 0.8% in March. Motor vehicle inventories rose 0.8% rather than 0.9% as previously reported. They gained 1.2% in March.

Retail inventories excluding autos, which go into the calculation of GDP, rose 0.6% as estimated last month. They increased 0.6% in March. Wholesale inventories climbed 0.6% while stocks at manufacturers rose 0.3%.

Business sales increased 1.2% in April after surging 2.2% in the prior month. At April's sales pace, it would take 1.31 months for businesses to clear shelves, down from 1.32 months in March. The inventories/sales ratio was at 1.38 months in April 2025.