Ahead of the Bell: Business Inventories

AP News
Posted: Oct 15, 2010 7:14 AM
Ahead of the Bell: Business Inventories

Economists are looking for business inventories to increase for an eighth consecutive month.

Economists at JPMorgan Chase forecast that the government will report business inventories increased 0.6 percent in August. Economists surveyed by Thomson Reuters expect a 0.5 percent rise. The Commerce Department will release the new figure at 10 a.m. EDT Friday.

In July, business inventories rose 1 percent, which was the strongest monthly gain in two years.

Total business sales had risen 0.7 percent in July after posting declines in May and June.

The July rebound in sales was an encouraging sign that consumer demand was rising again after two weak months. Businesses build up their stocks when they anticipate stronger sales.

Inventory growth helped drive the economic expansion in the final quarter of 2009 and early this year.

Many businesses replenished their stockpiles after slashing them during the recession. That led to rising orders at American factories and helped lead the early stages of the recovery from the country's worst recession since the Great Depression.