P.M. BRIEFING : High Inventories Hint Recession
Business inventories climbed to their highest level in two months in October, the government said today, and some analysts said that while the backlog has not reached dangerous heights yet, it is flashing warning signs about a possible recession.
“We have not reached the point where we need to call out the Marines, but there are some warning signals,” said Robert G. Dederick, chief economist for Northern Trust Co. in Chicago.
On the other hand, economist Michael P. Niemira of Mitsubishi Bank in New York said that while businesses need to be cautious, they have better inventory control now and should be able to correct problems before they become too serious.
The Commerce Department said inventories climbed 0.4% to a seasonally adjusted $793.9 billion in October after remaining flat in September. The September report was revised from a 0.2% increase reported earlier and followed a 0.4% advance in August.
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