Stockpiles of goods on shelves and back lots rose to a seasonally adjusted $1.1 trillion in July, a 0.4 percent increase from June's level.

At the same time, businesses' sales went up by a strong 1.2 percent in July, the largest gain in three months.

The rebuilding of stocks comes after a more than year-long string of inventory reductions by businesses as they tried to cope with a slump that sapped demand and led to a pileup of unsold goods.

In July, retailers boosted inventories by 0.9 percent as sales rose a sizable 1.3 percent. That followed a 0.5 percent increase in inventories in June and a 1.5 percent advance in sales.

More recently, sales at the nation's retailers rose 0.8 percent in August, led by a 1.9 percent jump in automobile sales, the government reported on Friday.