–Retail Auto Inventories +0.8%, Retail Inv Excl. Auto Up 0.2%
–Business Sales Up 1.2% in November On Gains At Every Production Level

By Kevin Kastner

WASHINGTON (MNI) – The value of business inventories rose in
November for the eleventh straight month, but the increase was less than
expected due to a flat reading for retail inventories, data released
Friday morning by the Commerce Department showed.

The 0.2% rise in business inventories was well below the 0.7% gain
expected, with retail inventories flat due to 0.8% drop in motor vehicle
and parts inventories.

The remaining retail categories combined for a 0.2% rise, with
clothing store inventories down and department store inventories flat
heading into the holiday season. The rest of the retail components were
up, especially furniture inventories, which rose 1.2% in November as
sales fell 0.1%.

The flat retail reading was in addition to the already reported
0.8% rise in factory inventories. Wholesale inventories were already
reported down 0.2%.

Overall business inventories would have been up 0.3% in November if
the drop in retail motor vehicle inventories was excluded, based on a
Market News International calculation.

Business sales rose 1.2% in November on gains in all three levels
of production. Sales were up sharply from year ago, running 10.6% ahead
of their November 2009 pace before seasonal adjustment and 8.5% after
seasonal adjustment.

At the same time, inventories were 6.9% above their year-ago levels
before seasonal adjustment and up 6.8% after seasonal adjustment.

As a result of the large sales gain, the inventory-to-sales ratio
fell in November to 1.25 from 1.27 in October and 1.27 in November 2009.
The November 2010 ratio was the lowest since May.

With monthly inventory sales gains outpacing inventories, the data,
especially the inventory/sales ratio, suggest that businesses are
cautiously holding the line against overstocking despite signs of sales
improvement.

** Market News International Washington Bureau: 202-371-2121 **

[TOPICS: MAUDS$,MT$$$$,M$U$$$,MAUDR$]