The U.S. April business inventory report tracked estimates
The U.S. April business inventory report tracked estimates with a 0.5% headline rise after a flat March figure. Inventories have bounced into Q2 after big gyrations through the turn of the year related to tariff "front running" swings in imports and weakness in December retail sales. Analysts now have a lift from accumulating 737 inventories at Boeing. Analysts no longer expect a Q1 GDP growth trimming from 3.1%, with a $1 B downward inventory revision that reflects no retail inventory adjustment but a $1 B hit for factories. This accompanies upward revisions of $4 B for both exports and imports, $3 B for both nonresidential and public construction, and $1 B for intellectual property investment, but a downward bump of $6 B for consumption. Our 1.9% Q2 GDP estimate incorporates a big $57 B inventory subtraction. Analysts expect a Q2 drop in the accumulation rate to the $68 B area from an estimated $124.5 (was $125.5) B in Q1.