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.
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