Inventory Build Outpaces Sales In December
February 13, 2014 by UPI - United Press International, Inc.
WASHINGTON (UPI) — Business manufacturing and trade sales rose in December, but slower than the inventory build, the U.S. Census Bureau said Thursday.
Sales rose to $1.317 trillion, up 0.1 percent from November, while inventories rose 0.5 percent to $1.707 trillion.
The figures suggest that businesses anticipated higher sales, which did not materialize. In response, factory orders could be expected to slow down until sales catch up.
The monthly figures adding up manufacturing and trade inventories were slightly higher than the consensus forecast, which called for a 0.4 percent inventory gain.
Inventories were up 4.4 percent from December 2012. Sales rose 3.8 percent from December a year prior.
The total business inventories-to-sales ratio was 1.3 based on seasonally adjusted data, slightly higher than the 1.29 ratio of December 2012.
The ratio indicates how long it will take to sell existing inventory at current prices. As the ratio rises, it indicates manufacturers may have too much inventory on hand and may adjust by slowing production.