Rising Inventories Could Mean Production Slowdown

Washington, DC, April 15, 2008--Business inventories rose by a significant amount for a second straight month in February, which could slow economic growth in the months ahead as businesses cut down on production.

The Commerce Department said Monday that inventories increased by 0.6 percent in February after a 0.9 percent gain in January.

Inventories at building material stores rose 0.4 percent. Automobile inventories were up 0.4 percent.

Excluding automobiles, retail inventories only rose 0.1 percent.

Sales of building materials fell by 0.1 percent during the month.

The February increase came at all stages of production. Manufacturing inventories rose by 0.5 percent, wholesale inventories were up 1.1 percent and retailers saw their stockpiles increase by 0.2 percent.

The rise in inventories was boosted by a drop in sales for the month.