August business inventories rise 0.3% and sales drop 1.8%

October 15, 2008 by · Leave a Comment
Filed under: Economic News 

Consumers are less likely to spend in this environment on anything beyond the essentials.  Our back to school season was pretty bad and that does not set a good stage for the upcoming holiday season.  At the time of this writing the Dow Jones Industrial Average was down over 335 points for a second day of decline after the largest rally in history on Monday.  I believe that was a “dead cat” bounce and we are in for more declines in the market until prices get to a level that investors feel comfortable with.  Personally I am sitting on the sideline to see how this week plays out and also to see more earnings numbers.

Press Release:

Stocks of unsold goods at U.S. businesses rose 0.3 percent in August, while sales were hit by their largest drop in nearly two years, the Commerce Department said on Wednesday.

The sales plunge of 1.8 percent was the largest since a 2.1 percent decline in September 2006 and helped push the inventories to sales ratio, which measures how long it would take to empty shelves at the current pace, up to 1.27 months’ worth, the highest since February.

Wall Street analysts polled by Reuters had expected business inventories to rise 0.5 percent, after they rose an unrevised 1.1 percent in July.

Retailers, which hold about one third of business inventories, saw their stocks fall 0.6 percent in August, while sales slipped 0.5 percent.

From August 2007, business inventories rose 6.4 percent and were outpaced by sales, which increased 6.7 percent, the Commerce Department said.

Source: Reuters

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