Business inventories rise 0.7 percent in October (AP)

WASHINGTON – Inventories held by U.S. businesses rose for a 10th consecutive month in October as companies saw sales increase by the largest amount in seven months.

Business inventories increased 0.7 percent in October after a revised 1.3 percent rise in September, the Commerce Department reported Tuesday. October sales jumped 1.4 percent, the biggest advance since a 2.5 percent rise in March.

Continued strong gains in inventories and sales are viewed as encouraging signs for the economy.

Many businesses had undertaken a massive liquidation of inventories in early 2009 as they struggled to keep costs under control during the recession. The swing from slashing inventories to rebuilding stockpiles has provided support for growth beginning in the final three months of 2009 — just months after the recession officially ended in June 2009.

For October, the 0.7 percent rise in total inventories reflected a 0.9 percent increase in inventories held by manufacturers and a 1.9 percent rise in inventories held by wholesalers. Inventories at the retail level dropped 0.6 percent, but that mostly because of a strong month for auto sales.

The 1.4 percent rise in sales showed strength at all points in the supply chain. Sales by manufacturers rose 2.2 percent with smaller gains posted by retailers and manufacturers. A separate report Tuesday showed that retail sales increased sharply in November.

Total inventories climbed to $1.42 trillion in November, increasing 7.5 percent from the lowpoint for stockpiles of $1.32 trillion reached in September of 2009.

The ratio of inventories to sales stood at 1.27 in October. That means it would take 1.27 months to deplete stockpiles at the October sales pace. That was down from 1.28 months in September.

The breaking news, Business inventories rise 0.7 percent in October
extract from US Economy

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