Seasonally adjusted U.S. business inventories expanded by 0.5% month over month to $1.961 trillion in August from the revised $1.951 trillion in July, the Commerce Department's Census Bureau said in a preliminary report.

The rate of increase was in line with the Econoday consensus forecast.

Manufacturers' inventories fell to $675.61 billion in August from $676.15 billion in the prior month; retailers' stocks climbed to $642.46 billion from $638.15 billion; and merchant wholesalers' inventories increased to $642.71 billion from $636.34 billion.

Motor vehicle and parts dealers saw stocks tick up 1.8% in August following a 1.4% rise in the prior month.

Total business sales edged up to $1.462 trillion from the revised $1.455 trillion.

Compared with a year ago, inventories improved 4.2%, while sales jumped 7.8%.

The inventories-to-sales ratio at the end of August was 1.34, compared with 1.39 in August 2017.