-Total Business Inventories Excluding Retail Auto Up 0.3%
-Retail Inventories Ex Auto +0.4%; Retail Categories Mixed
-Business Sales Fall 0.4% In October After September’s 1.2% Jump

By Kevin Kastner

WASHINGTON (MNI) – The value of business inventories rose 0.4% to
another record high level in October, as retail inventories were up 0.6%
to add to the inventory gains at the factory and wholesale levels
already announced, data released Thursday morning by the Commerce
Department showed.

Analysts in an MNI survey had expected total business inventories
to rise 0.5%. Factory inventories were already reported up 0.1% in the
month, while wholesale inventories rose 0.6%.

Overall business inventories would have been still have been up
0.3% in October if a sharp rise in retail motor vehicle inventories was
excluded, an MNI calculation showed.

Retail motor vehicle and parts inventories rose 0.9%, as sales fell
1.9% that month. The remaining retail inventories categories combined
for a 0.4% increase in October.

Outside of motor vehicles, there were retail inventory gains in the
furniture, and general merchandise categories. Offsetting those were
declines in the food and beverage and clothing categories. Inventories
of building materials and garden supplies were roughly flat.

In addition, an MNI calculation of retail inventories not included
in the published categories shows a 0.4% increase in October after a
0.1% rise in the previous month.

Business sales fell 0.4% in October following a 1.2% surge in the
previous month. Retail sales excluding food services fell 0.4% in
October, as announced earlier Thursday. Wholesale sales were already
reported down 1.2% in the month, while manufacturing shipments, which
are equal to sales in this report, rose 0.4%.

As a result of the rise in business inventories and the decline in
sales in October, the inventory-to-sales ratio rose to 1.29 in the month
from 1.28 in September. The October ratio was above the 1.26 ratio
reported in October 2011.

However, before seasonal adjustment, the ratio was 1.28 in October,
down from 1.31 in September and 1.29 in October 2011.

Despite the decline in October, business sales were still up from a
year ago, 6.3% ahead of their October 2011 level before seasonal
adjustment and up 3.1% after seasonal adjustment.

At the same time, October business inventories were 5.6% above
their year-ago levels before seasonal adjustment and up 5.7% after
seasonal adjustment.

** MNI Washington Bureau: 202-371-2121 **