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 Posted: Mon Nov 16, 2009 7:20 am |
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bush and obama bailed out wall street, but have done nothing for
demand, demand is wage driven, deflation is driven by a lack of
demand:Businesses cut inventories for 13th consecutive month in
September, sales also fall
http://finance.yahoo.com/news/Businesses-cut-inventories-apf-160221575.html?x=0
Businesses cut inventories for 13th straight month
Businesses cut inventories for 13th consecutive month in September,
sales also fall
• By Martin Crutsinger, AP Economics Writer
• On 10:12 am EST, Monday November 16, 2009
WASHINGTON (AP) -- Businesses slashed inventories for a 13th
consecutive month in September although the pace of reductions slowed
from the previous month. The economic rebound is expected to remain
tentative until businesses switch to rebuilding their stockpiles.
The Commerce Department said Monday that businesses reduced
inventories 0.4 percent in September. That's slightly better than the
0.7 percent drop economists expected and much improved from a 1.6
percent decline in August.
Sales also fell 0.3 percent in September, the first setback since May.
Still, businesses soon may begin restocking depleted store shelves
after more than a year of cuts. If that occurs, factory production
will begin to rise on a sustained basis, helping to bolster a broad
recovery from the worst recession since the 1930s.
The ratio of sales to inventories held steady in September at 1.32.
That means that it would take 1.32 months to deplete stockpiles at the
September sales pace.
The September decline reflected a 1 percent drop in inventories held
by manufacturers and a 0.9 percent fall in stockpiles held by
wholesalers. Retail inventories rose 0.6 percent.
Factories hold about one-third of all inventories, wholesalers hold
about 25 percent and retailers hold the rest.
The economy grew at a 3.5 percent pace in the third quarter, breaking
a record string of four straight drops. Businesses did reduce their
stockpiles of goods in the third quarter, but less than the record
pace in the second quarter.
The hope is that even a small increase in demand will prompt factories
to boost production and help sustain the recovery in the coming
months.
The September reduction was the 13th consecutive decline, the longest
stretch since inventories dropped for 15 straight months in 2001 to
2002, a period that covered the last recession. The last growth in
inventories was a 0.1 percent rise in August 2008. |
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