Inventories at American businesses rose in December and may act as a modest drag on economic growth in the first quarter of this year.

They increased 0.4 percent to a seasonally adjusted $1.05 trillion following a 0.3 percent advance in November, the Commerce Department said Friday. December marked the 18th month without a decline."Involuntary inventory building in late 1997, particularly for retailers, will lead to slower accumulation in early 1998," said economist Stan Shipley of Merrill Lynch in New York.

However, business sales jumped 0.9 percent in December after falling 0.3 percent in November.

"Any adjustments . . . (to production) are likely to be small," said economist Steven Wood of BancAmerica Robertson Stephens in San Francisco.

At retailers, inventories jumped 0.8 percent in December while sales rose only 0.3 percent. Wholesale inventories rose 0.9 percent, in line with a 0.8 percent sales increase. At factories, inventories edged 0.1 percent lower while sales surged 1.3 percent.

Despite a saw-toothed pattern of sales, overall inventory growth has remained aligned with sales. In December, there were enough goods on shelves and back lots to meet demand for 1.37 months at the current sales pace. That's a slight decline from 1.38 months a month earlier and also a year earlier.

A rapidly growing pileup of inventories and lagging demand could signal a sharp slowdown ahead for the economy. It could encourage factories to trim production while excess inventories were sold.

So far that hasn't happened. Analysts believe the U.S. economy is well-balanced as it enters 1998 and that it will continue to expand, albeit at a more moderate rate than in 1997, because of depressed export sales to financially ailing Asia.

Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said even if Asia's problems slow growth in America, the economy will remain strong this year. Speaking to the Kansas Bankers Association in Wichita, Kan., he predicted the stock market would remain strong too.