Business Inventories Outstrip Sales


Business sales are down and inventories are up, according to a U.S. Department of Commerce report [link opens in PDF] released today. Seasonally adjusted manufacturer sales and shipments fell 0.4% from September to October 2012's $1.26 trillion estimate.

Over the same period, inventories rose 0.4% to $1.62 trillion, matching analyst expectations.

Compared to October 2011, sales increased 3.1%, while inventories bumped up 5.7%.

To understand the rate at which goods are being made and sold, economists compute an inventories/sales ratio. Since sales fell and inventories rose from September to October, the inventories/sales ratio also rose, to 1.29, compared to the previous month's 1.28 value. The October 2011 ratio was 1.26.




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