Washington, DC, December 13, 2006--Business inventories rose in October to their highest level in relation to sales in more than two and a half years, the Commerce Department reported Wednesday.
Sales at businesses fell 0.2% in October after a record 2.3% drop in September. Inventories rose 0.4% in October, as expected by economists, after a revised 0.3% gain in September.
The inventory-to-sales ratio rose to 1.31 from 1.30. It's the highest since February 2004. The typical business has goods on hand to meet nearly 40 days of sales.
Retail inventories were flat in October, as inventories at auto dealers fell by 0.6%.
In the past year, business sales are up 3.6%, while inventories are up 7.3%. The figures are not adjusted for price changes.
In the retail sector, sales fell 0.1% in October. The retail inventory-to-sales ratio rose to 1.50 from 1.49.
Retail auto inventories fell 0.6% while sales rose 1%. Automakers are trying to work down their inventories and have announced production cutbacks. In the retail auto sector, the inventory-to-sales ratio fell to 2.07 from 2.11.
Excluding autos, retail inventories increased 0.3% in October while sales fell 0.4%.
Manufacturing sales rose 0.1% while inventories rose 0.4%. The inventory-to-sales ratio remained at 1.23.
In the wholesale sector, sales fell 0.5% while inventories increased 0.8%. The inventory-to-sales ratio rose to 1.20 from 1.18.
