Business
See other Business Articles
Title: Inventories at U.S. Companies Fall as Sales Rise
Source:
Bloomberg
URL Source: http://www.bloomberg.com/apps/news? ... 0601087&sid=assQEqTlvQGQ&pos=3
Published: Feb 12, 2010
Author: Timothy R. Homan
Post Date: 2010-02-12 12:26:44 by Brian S
Keywords: None
Views: 748
Comments: 1
Feb. 12 (Bloomberg) -- Inventories in the U.S. unexpectedly fell in December for the first time in three months as companies couldn’t keep up with increasing demand. The 0.2 percent decrease in stockpiles followed a 0.5 percent increase the previous month, figures from the Commerce Department showed today in Washington. Sales advanced 0.9 percent after jumping 2.4 percent in November. A record inventory drawdown last year means companies will need to increase orders as sales improve, setting the stage for a sustained manufacturing expansion. Another report today showed purchases at retailers in January exceeded the median forecast of economists surveyed by Bloomberg News. “We’re seeing some strength in sales, so inventory gains are on the horizon,” said Kim Whelan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast the December drop. “Inventories will continue to add to growth through all of 2010.” Economists forecast inventories would climb 0.2 percent, after a previously estimated 0.4 percent gain in November, according to the median of 58 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.4 percent to an increase of 0.7 percent. Another report from the Commerce Department today showed retail sales climbed in January for the third time in four months, signaling the consumer spending recovery that began in late 2009 continues into the new year. Exceeds Forecast The 0.5 percent increase exceeded the median estimate of economists surveyed and followed a 0.1 percent drop the prior month that was smaller than previously estimated. Purchases excluding autos rose 0.6 percent. A third report showed confidence among U.S. consumers unexpectedly fell in February from a two-year high, signaling Americans may not be convinced the job market is turning around. The Reuters/University of Michigan preliminary consumer sentiment index dropped to 73.7 from January’s 74.4. Stocks dropped after China unexpectedly increased bank reserve requirements in a bid to slow the world’s fastest growing major economy. The Standard & Poor’s 500 Index fell 1.2 percent to 1,065.20 at 11:04 a.m. in New York. Companies had 1.26 months’ supply of goods on hand in December, down from 1.27 months a month earlier and the fewest since June 2008, today’s inventories report showed. Retail Stockpiles Retailers’ inventories, the only part of today’s report not previously released, were unchanged in December after dropping 0.2 percent the prior month. Retail sales, excluding food, decreased 0.1 percent in December. Factory inventories fell 0.1 percent, and wholesale stockpiles decreased 0.8 percent in December. Efforts to prevent inventories from dropping further contributed 3.4 percentage points to the U.S. economy’s 5.7 percent annual rate of expansion in the fourth quarter of 2009. Last quarter’s growth rate was the strongest in six years. The need to rebuild stockpiles is one reason factories are ramping up production. A report Feb. 1 from the Institute for Supply Management showed manufacturing in January expanded at the fastest pace in five years, while its measures of new orders and output climbed. Rockwell Automation Inc., the Milwaukee-based maker of factory software, raised its 2010 forecast, and profit in its first fiscal quarter fell less than anticipated. Demand was strongest in the U.S., led by orders from recovering industries including automakers, Chief Executive Officer Keith Nosbusch said in a Jan. 27 interview. Companies “de-stocked to the point where any need had to be filled immediately, one to one, as opposed to before where they were able to take it out of their inventory supply chain,” he said.
Post Comment Private Reply Ignore Thread
Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: Brian S (#0)
Exporters are doing well and the recent ISM survey is a positive for continued manufacturing growth...the domestic economy has a lot of slack to work out...
I’ll see what I can do about posting a more current pic, if you really want one. Badeye posted on 2003-03-15 09:26:22 ET Reply Trace A record inventory drawdown last year means companies will need to increase orders as sales improve
Top • Page Up • Full Thread • Page Down • Bottom/Latest
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]