Business sales and inventories are both up, according to a Commerce Department report for October (link opens as pdf) released today.
Seasonally adjusted sales increased 0.5% to $1,307 billion for October, led primarily by a 1% boost in merchant wholesalers sales. In the last year, merchant wholesalers sales have soared 6.4%, followed by a 4% increase in retail, and a sluggish 1.5% uptick in manufacturing.
As sales headed higher, inventories expanded a seasonally adjusted 0.7% to $1,691 billion for October. Analysts had expected only 0.3%, less than half as much growth. Once again, merchant wholesalers provided the main push, increasing inventories by 1.4%. In the last year, overall inventories are up 3.6%, with retail inventories up the most at 6.1%.
To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales and inventories both expanded relatively similar amounts, the inventories/sales ratio remained unchanged at 1.29.
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