U.S. business inventories rose 0.2 percent in December, slightly less than expected, as brisk sales kept stocks lean, a government report showed on Tuesday.
Wall Street analysts had expected December inventories to rise 0.3 percent.
Retail inventories rose 0.3 percent despite a 1.2 percent fall in motor vehicle and parts stocks in the month, the Commerce Department said. Excluding motor vehicles and parts, retail stocks were up 1.0 percent.
Stocks at manufacturers dropped 0.1 percent, while wholesale stocks rose 0.4 percent in December.
Sales at manufacturers, retailers and merchant wholesalers rose 1.0 percent in December after a more modest 0.4 percent expansion in November. Retailers' sales rose 1.1 percent in December, a key sales month, while manufacturers and merchant wholesalers posted 0.9 percent sales gains.
Increases in business inventories can either signal improved confidence in future demand or a decline in sales resulting in involuntary stock building. Business inventories are also a component of gross domestic product.
The inventory-to-sales ratio, which measures how long it would take to deplete stocks at the current sales pace, declined to 1.30 months' worth in December, matching the record low last touched in October.
November's business inventories were revised higher to a 1.1 percent increase, from the originally reported 1.0 percent gain.