Washington, DC, November 10-- The Commerce Department said Tuesday that wholesale inventories climbed 0.5% to a seasonally adjusted $319.30 billion in September after a revised 1% increase in August.
Wholesale sales rose 0.6% to a seasonally adjusted $276.85 billion following a revised 1.0% gain in August.
Economists interpret rising inventories as either a sign of confidence in future demand or the result of an unanticipated sales drop that has led to involuntary stockpiling. To determine which is the case, experts look at the inventory-to-sales ratio. The ratio has been very low all year, suggesting stocks are lean.
The inventory-to-sales ratio remained unchanged at 1.15 in September; it was 1.20 in September 2003. The ratio measures how many months it would take for a firm to exhaust its current inventory. Year over year, wholesale inventories were up by 9.8% in September, while sales were up 14.5% from a year ago.
Tuesday's data showed inventories of durable goods -- meant to last three or more years -- rose 1.0%. Machinery stocks went up 0.4% and metals rose 2.6%, offsetting a 0.6% decline in auto supplies. Durable goods sales dipped 0.1%.
Inventories of non-durable goods fell by 0.3% as stocks of drugs went down 0.2%. Petroleum inventories declined 2.7%, the biggest drop since March's 3.1% decrease. Apparel was up 2.3%. Sales of non-durables rose 1.3%.
