P.M. BRIEFING : Business Sales in November Outpace Inventories by .2%

Business inventories rose 0.5% in November, but business sales rebounded by a brisker 0.7%, the government said today.

Faster growth of sales than accumulation of goods on shelves and back lots is good news for the economy. If inventories piled up excessively, it could mean cutbacks in production and a loss of jobs.

However, some industries such as automobiles are already feeling the effects of excess inventories.

Chrysler, Ford and General Motors have announced temporary layoffs to reduce the number of vehicles stuck on back lots. Mazda Motor Corp. of Japan is trimming production at its U.S. plant later this month.

The Commerce Department said inventories climbed to a seasonally adjusted $796.8 billion in November after rising 0.3% a month earlier. That was a bit better than the 0.4% increase originally reported.

Business sales also rose to a seasonally adjusted $523.6 billion after falling a revised 0.5% in October. That revision showed a slight improvement over the 0.7% drop originally reported.

The result in November business activity produced a slight decline, to 1.52, in the ratio of inventories to sales. That means it would take 1.52 months to exhaust inventories at the November pace. The ratio was 1.53 in October.