US in­ven­tory-to-sales ra­tio hits high­est level since 2009

The Pak Banker - - BUSINESS -

WASH­ING­TON: U.S. busi­ness in­ven­to­ries edged up in De­cem­ber as sales fell, push­ing the in­ven­tory-to-sales ra­tio to its high­est level in 6-1/2 years. The Com­merce Depart­ment said on Fri­day in­ven­to­ries rose 0.1 per­cent af­ter a re­vised 0.1 per­cent dip in Novem­ber. In­ven­to­ries in Novem­ber were pre­vi­ously re­ported to have dropped 0.2 per­cent. Econ­o­mists polled by Reuters had fore­cast in­ven­to­ries, which are a key com­po­nent of gross do­mes­tic prod­uct, nudg­ing up 0.1 per­cent in De­cem­ber. Retail in­ven­to­ries ex­clud­ing au­tos, which go into the cal­cu­la­tion of GDP, in­creased 0.2 per­cent in De­cem­ber af­ter gain­ing 0.3 per­cent in Novem­ber.

The govern­ment in its ad­vance GDP re­port last month es­ti­mated that the econ­omy grew at a 0.7 per­cent an­nual rate in the fourth quar­ter. But weak con­struc­tion spend­ing, whole­sale in­ven­tory and fac­tory or­ders re­ports al­ready had sug­gested that fourth-quar­ter GDP growth could be re­vised down to an an­nual rate of about 0.3 per­cent. A record in­ven­tory ac­cu­mu­la­tion in the first half of 2015, which out­paced de­mand, left busi­nesses stuck with un­sold mer­chan­dise and lit­tle in­cen­tive to or­der more goods. That has con­trib­uted to a sharp down­turn in man­u­fac­tur­ing. Busi­ness sales fell 0.6 per­cent in De­cem­ber af­ter de­clin­ing 0.4 per­cent in Novem­ber. At De­cem­ber's sales pace, it would take 1.39 months for busi­nesses to clear shelves. That was the high­est in­ven­tory-to-sales ra­tio since May 2009 and up from 1.38 in Novem­ber.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.