US business stockpiles rise 0.4 percent in October

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Associated Press

Posted on December 13, 2012 at 9:36 AM

Updated Thursday, Dec 13 at 10:04 AM

WASHINGTON (AP) — U.S. businesses added to their stockpiles in October while sales fell, a sign that companies may order fewer goods in the coming months.

The Commerce Department says inventories rose 0.4 percent, down from a 0.7 percent increase in September and the smallest gain in four months. Sales, meanwhile, dropped 0.4 percent.

Rising inventories and falling sales suggest that companies may have ordered more goods than they need. As a result, they are likely to cut back on orders in the coming months, which would slow factory output and economic growth.

A ratio of inventories to sales rose to its highest level in three years in October. That also indicates that companies may have restocked too much. A big increase in stockpiles accelerated economic growth in the July-September quarter.

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