Business Inventories Continue To Rise

Constructive inventory growth looks to be a major plus for third-quarter GDP. Business inventories rose 0.5 percent in August with July's build revised 1 tenth higher to an even stronger 0.7 percent. Relative to sales, inventories remain lean, at a sales-to-inventory ratio of 1.34 which is unchanged from July. Business sales rose 0.5 percent in August and, at a year-on-year plus 7.8 percent, remain well ahead of inventory growth which is at 4.2 percent.