Business Inventories Continue To Grow

Inventory growth is steady and in line with underlining sales growth in what is a solid positive for the economic outlook. Business inventories rose 0.4 percent in July vs a 0.8 percent rise in business sales that keeps the stock-to-sales ratio unchanged at a healthy and lean 1.29.

Retail inventories, reflecting strong growth in autos, show an especially large increase, at plus 1.0 percent. But this a desired build given the increasing acceleration underway in vehicle sales. Inventories at both manufacturers and wholesalers inched up only 0.1 percent in July and are likely to be restocked given the sales strength at retailers, underscored strongly in this morning's retail sales report for August.

Restocking will be a plus for both future production and, very importantly, for employment.