{"id":56114,"date":"2017-03-15T17:52:48","date_gmt":"2017-03-15T22:52:48","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=56114"},"modified":"2017-03-15T18:46:38","modified_gmt":"2017-03-15T23:46:38","slug":"inventories-to-sales-ratio-declines-despite-increase-in-inventories-signaling-possible-production-growth","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/inventories-to-sales-ratio-declines-despite-increase-in-inventories-signaling-possible-production-growth\/","title":{"rendered":"Business inventories rise in January, signaling economic growth"},"content":{"rendered":"

By Katherine Hyunjung Lee<\/strong><\/p>\n

Business inventories for manufacturers, wholesalers and retailers in January increased a seasonally adjusted 0.3 percent, after a 0.4 percent rise in December, according to data released Wednesday by the U.S. Census Bureau.<\/p>\n

Auto inventories posted the sharpest rise — up a seasonally adjusted 2.4 percent. Economists said a broad increase in other durable goods categories, such as furniture, appliances and building materials, were a good sign.<\/p>\n

\u201cInventories will provide support to headline GDP for the first quarter of 2017,\u201d Daniel Sanabria, senior economist at Comerica Bank, wrote in a blog post.<\/p>\n

<\/p>\n

Sanabria also observed \u201cthe overall inventory-to-sales ratio is trending down, which is a good sign, after trending up through 2015.\u201d<\/p>\n

The total business inventories-to-sale ratio remained constant from December at 1.35 percent.<\/p>\n

\"\"
In January, the total business inventories-to-sales ratio was 1.35, consistent with the previous month’s ratio. The inventories-to-sales ratio has been decreasing in recent months.<\/figcaption><\/figure>\n

The level of inventories is closely watched by economists because it is a component of gross domestic product and can signal turning points in the economy.<\/p>\n

\u201cFluctuations in inventories in fixed investments, which could include housing and durable goods, account for all of the fluctuations in the business cycle,” said Thomas Kevin Swift, chief economist at the American Chemistry Council.<\/p>\n

Rising inventories may signal business optimism and boost GDP. But a pile-up of inventories may reflect slowing consumer spending that could lead to cuts in production and employment.<\/p>\n

\u201cTo the extent that the inventory imbalance that has occurred in 2015 is easing, productive activity will improve going forward.\u201d Swift said. \u201cSales are now well above the growth rate in inventory, which is good for the economy and good for manufacturing.\u201d<\/p>\n

The Manufacturing and Trade Inventories and Sales estimates are based on monthly surveys for retail trade and wholesale trade, as well as surveys on manufacturers\u2019 shipments, inventories and orders.<\/p>\n

Photo at top: Experts say that recent growths in inventories and sales signal positive changes to the manufacturing industry and the economy in general.(Photo by Martin Howard via Flickr<\/a>)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Katherine Hyunjung Lee Business inventories for manufacturers, wholesalers and retailers in January increased a seasonally adjusted 0.3 percent, after a 0.4 percent rise in December, according to data released Wednesday by the U.S. Census Bureau. Auto inventories posted the sharpest rise — up a seasonally adjusted 2.4 percent. Economists said a broad increase in […]<\/p>\n","protected":false},"author":375,"featured_media":56123,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,3516],"tags":[],"class_list":["post-56114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2017"],"yoast_head":"\nBusiness inventories rise in January, signaling economic growth - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/inventories-to-sales-ratio-declines-despite-increase-in-inventories-signaling-possible-production-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business inventories rise in January, signaling economic growth - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Katherine Hyunjung Lee Business inventories for manufacturers, wholesalers and retailers in January increased a seasonally adjusted 0.3 percent, after a 0.4 percent rise in December, according to data released Wednesday by the U.S. Census Bureau. 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