Nov Business Inventories rose .4% m/o/m, .1% more than expected and Oct was revised up by .2% to a gain of .4%. The two months in a row of gains follow 13 straight months of declines and remains the key basis and starting point for the economic recovery theme. Because sales rose 2%, the inventory/sales ratio fell to 1.28 from 1.30, the lowest since July ’08. Retail Auto and parts inventories rose .1% and are now up for a 3rd straight month while still remaining down 24.2% y/o/y. Wholesale inventories which we saw last week, rose by 1.5% and make up 25ish% of today’s figure. Retail general merchandise inventories fell .4% and are down 5 straight months and follows what we heard in the Beige Book yesterday that retail store inventories remain lean. Overall, the slowing in the rate of inventory reductions (still down 10.9% y/o/y) will continue to add to GDP and the bridge to actual increases will ultimately depend on the direction of end demand.
Business Inventories rise for 2nd month after 13 of declines
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