Business Inventories Open Quarter On Positive Note

Business inventories open up the fourth-quarter on a positive note, rising 0.6 percent vs an upwardly revised 0.5 percent build in September. A large build, at 0.8 percent, comes from retailers where further restocking may be the ongoing theme given areas of key strength in this morning's retail sales report for November. Inventories at wholesalers also rose 0.8 percent with manufacturers lagging at 0.1 percent.

Inventories relative to overall sales, however, may be looking less lean. Business sales rose only 0.3 percent in November to lift the inventory-to-sales ratio to 1.35 from 1.34. This is a reminder of the large and welcome inventory build during the third quarter which has lifted stocks, perhaps, to balanced levels.