Inventories Should Continue Growth

Sales in December outpaced U.S. business inventory levels, indicating that companies will continue to restock for the time being, according to recently released Commerce Dept. data. The 0.4 percent increase in stockpiles followed a 0.3 percent advance the prior month. The median projection in a Bloomberg News survey called for a 0.5 percent rise. Sales climbed 0.7 percent, the most since July.

“Inventory replenishment, which helped the economy grow last quarter at the fastest pace in more than a year, may extend into this year as a pickup in hiring boosts purchases,” a Bloomberg report states. Another report shows retail sales rose less than forecast in January, held back by an unexpected drop in demand at auto dealers.

Economists say that with employment gains, we can expect an improvement in demand—which means inventory building should continue.

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