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Inventories at U.S. companies climbed 0.7%, less than forecast

12/14/2010

Washington, D.C. -- A report released Tuesday by the U.S. Commerce Department said that inventories in the United States rose 0.7% in October, less than forecast. The rise was restrained by the biggest drop in retail stockpiles in more than a year as merchants had trouble keeping up with surging demand.



The increase in inventories compared with a 1.4% jump in sales in October that was the biggest gain in seven months, the Commerce Department said. The September increase in stockpiles was revised up to 1.3% from a previously reported 0.9% advance.



Companies had enough goods on hand to supply 1.27 month’s worth of sales at October’s pace, less than in the prior month.



“We have to see strong sales to support the inventory numbers,” Robert Dye, a senior economist at PNC Financial Services Group in Pittsburgh, told Bloomberg on Tuesday.



Economists forecast inventories would rise 1%, according to the median of 51 projections in a Bloomberg News survey. Estimates ranged from gains of 0.1% to 1.5%.



Retailers’ inventories decreased 0.6% in October as sales jumped 1.8%, the most since March. Inventories at auto dealers and building material stores led the drop.

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