WASHINGTON (AP) – U.S. businesses reduced their stockpiles of goods in warehouses and on store shelves in October, while sales rose. That combination could point to higher orders for factory goods in the coming months.
The Commerce Department says business inventories fell 0.2 percent in October, the biggest drop in a year. Sales rose 0.8 percent, a healthy gain that points to solid consumer demand.
Falling inventories, while sales rise, indicate companies are working through excess supplies. If sales keep rising, businesses soon must order more goods to meet demand. That could boost factory output.
Companies may also be cutting stockpiles because they anticipate slower sales for the upcoming holiday shopping season. Sales grew at a slower pace in November than the previous month, according to a separate report Wednesday.