Business Inventories Looking Lean

Business inventories in the United States rose by 0.7% in January.  The report was a tad higher than expected against the 0.5% estimates.  The reported sales component was up by about 0.4%, but the inventory-to-sales ratio remains at a low rate of 1.27 in January.  Effectively, that report is really a reading of how many months it would take for a business to burn off its current inventories of products.  Businesses must be running on light inventory levels as they have chosen to remain lean without as many goods on hand that could lead to production and order cuts.

Bloomberg recently noted, “More recently, for January manufacturers’ inventories gained 0.6 percent while wholesaler inventories advanced 0.4 percent.”