U.S. businesses added to their inventories for an 11th consecutive month in November as sales posted another strong increase. Inventories rose 0.2% in November, the smallest advance since a similar gain last May, the Commerce Department says. Sales rose 1.2% in November after an even bigger 1.5% October increase.
The November rise in inventories pushed them to $1.42 trillion, up 7.7% from the recent low of $1.32 trillion hit in September 2009. The smaller gain in inventories in November likely was affected by the strong sales pace, which can make it difficult for businesses to keep shelves stocked. Economists believe inventory rebuilding will continue as long as businesses have confidence that sales will improve. Gains in inventories have been a key factor supporting the overall economy. Rising orders to factories have led to increased production and hiring gains in manufacturing. The Federal Reserve reported industrial production rose 0.8% in December, the biggest increase in five months. For November, inventories held by manufacturers increased 0.8%, while inventories at the wholesale level fell 0.2% and retail inventories were unchanged.
