Inventories Build While Sales Lag for January
Business sales were down and inventories were up for January, according to a Commerce Department report (link opens in PDF) released today. Overall sales dropped a seasonally adjusted 0.3% to $1.269 billion, while inventories pushed up 1% to $1.642 billion. Market analysts had expected a slight 0.5% increase after December's revised 0.3% bump.
Inventories growth has managed to outstrip sales growth over the past year, as well. Business inventories have grown 5.6% in the last 12 months, compared to 2.9% for sales. The largest month-to-month adjusted increase (2.8%) came from general merchandise stores, but a 1.9% jump in "motor vehicle & parts dealers" was the key driver behind January's inventory increase.
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 December to January, the inventories/sales ratio also rose, to 1.29, compared to the previous month's 1.28 value. The January 2012 ratio was 1.26.
The article Inventories Build While Sales Lag for January originally appeared on Fool.com.You can follow Justin Loiseau on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.