Inventories, Sales Rose 0.4% In November --- Figures Suggest Merchants, Manufacturers Balanced Stock Against Demand
WASHINGTON -- Business inventories and sales both rose at the same rate in November, suggesting that U.S. merchants and manufacturers were successfully balancing the stocks on their shelves against growing consumer demand.</br></br>Manufacturers, retailers and merchant wholesalers expanded their inventories to $753.56 billion of goods in November, up 0.4% from $750.59 billion in October, the Commerce Department reported. At the same time sales grew to $503.84 billion from $501.91 billion, also a 0.4% increase. The numbers are adjusted for seasonal fluctuations but not for inflation.</br></br>"The inventory area is traditionally where if there are mistakes, we tend to see them," said Samuel D. Kahan, chief financial economist at Kleinwort Benson Government Securities in Chicago. "But the truth is that doesn't seem to be occurring. Businesses are keeping inventories in line with overall activities."</br></br>Fat inventory levels can send mixed economic signals. Rising levels of stocks are healthy if consumers are buying the items. But if businesses overestimate demand, they can be stuck holding goods they can't sell.</br></br>This doesn't seem to have been a problem in recent months. Overall, inventories equaled 1.50 months' sales in November, the same ratio as October and just below September's level of 1.51, the Commerce Department said.