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U.S. Businesses Boost Inventories As Sales Slow

Thu, 02/13/2014 - 1:52pm
Christopher S. Rugaber, AP Economics Writer

WASHINGTON (AP) -- U.S. businesses restocked their shelves and warehouses at a faster pace in December, but sales slowed, a cautionary sign for the economy.

The Commerce Department says inventories rose 0.5 percent after a 0.4 percent increase in November. Sales growth fell to just 0.1 percent, from 0.7 percent in November.

The figures point to a risk for the economy: if companies build their stockpiles at a faster pace than their sales are growing, they may end up stuck with more goods than they need.

That would force them to cut prices sharply and sell at discounts in order to clear the extra inventory. It would also cause businesses to order fewer goods, weighing on factory production.

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