Businesses Return To Inventory Liquidation Mode Fearing A Stalling Recovery

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The economic news continues to come in mixed. Consumer confidence is in the toilet. Inflation is tame. Sales increased. Unemployment was better than expected.

But businesses are becoming fearful again. Here’s the AP’s report on the latest Commerce Department numbers

WASHINGTON (AP) — Businesses trimmed inventories at the wholesale level again in January even though sales rose for a 10th consecutive month. The dip in inventories underscored that businesses remain cautious about restocking their depleted shelves.

The Commerce Department said that inventories at the wholesale level were reduced 0.2 per cent in January following a 1 per cent drop in December. Sales were up a solid 1.3 per cent, the best showing since a 3.6 per cent rise in November.

Economists are hoping that the steady gains in sales will soon prompt a sustained rebound in inventory restocking. That would trigger increased factory production and provide support for the fledgling recovery.

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