Business Inventories Unexpectedly Jump In October After 13 Months Of Decline

christmas holiday shopping window retail store

As David Rosenberg pointed out this week, the inventory drawdown is definitely over. Analysts had been looking for a continued inventory contraction in October, but instead they grew.

As noted below, there is a good angle (the restocking is good for factories) and a bad angle, as it could mean an end to selling.

It may take a few months before we know how this plays out.

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By MARTIN CRUTSINGER, AP Economics Writer

WASHINGTON (AP) — Businesses unexpectedly increased their inventories in October, halting a slide of 13 consecutive declines. The small gain raised hopes that businesses will begin restocking their depleted shelves, helping support the economic recovery.

The Commerce Department says businesses increased inventories 0.2 per cent in October. That was better than the 0.3 per cent drop economists had expected.

Total business sales rose 1.1 per cent, the fifth straight gain.

The hope is that steadily rising sales will encourage businesses to restock shelves, which will boost factory production and bolster a broad recovery.

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