Reply #15: U.S. Feb. inventories rise 0.5% - Business sales fall 0.4%, biggest drop

[UpInArms]

Business sales fall 0.4%, biggest drop in nearly 2 years

http://www.marketwatch.com/news/story.asp?guid=%7BB1107D76%2D35E4%2D46DB%2DB054%2DD1E11A1BF86B%7D&siteid=mktw

WASHINGTON (MarketWatch) - U.S. businesses added 0.5% to their inventories in February while their sales fell 0.4%, the Commerce Department said Thursday.

The drop in sales was the largest since April 2003.

The inventory-to-sales ratio rose to 1.31 in February from a record low 1.30 in January. The typical business has about 40 days of sales on hand in the backroom.

<snip>

Much of the data in the report had already been released. One new piece of information: Retail inventories increased 0.3% in February, including no change in auto inventories. Excluding autos, retail inventories increased 0.4%. Retail sales increased 0.4% in February.

<snip>

But if inventories get too tight, customers may be forced to go elsewhere to get goods on time, even if it means paying higher prices. On the other hand, if inventories were to get too loose, new orders would contract, employment might fall, and a recession could ensue.

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