Inventories Increase .2% in January

The inventories of America’s business warehouses edged up 0.2% in January after a 0.4% decline in December, the Commerce Department reported today.

An increase in the quantity of unsold goods points to weakness in the economy. A decline or small increase suggests businesses are keeping a close eye on their stockpiles of goods.

Jerry Jordon, an economist at First Interstate Bancorp in Los Angeles, said the report was “being read as favorable” because it suggested “modestly more demand than we expected.”

But economist Jill Thompson of DRM/McGraw Hill in Lexington, Mass., said, “You have to be disappointed in the month’s inventory numbers.

“The disappointment centers entirely in manufacturing. Manufacturers were clearly unprepared in the cutback in orders in January, and they got stuck with a lot of stuff that they didn’t want.”

The total value of inventories in January climbed to $795.9 billion after declining in December to a revised $794.1 billion, the department’s Census Bureau said in its monthly report.

The numbers were adjusted to reflect seasonal factors such as the weather.

January inventories of durable goods, items made to last three or more years, increased by less than 1% to $488.1 billion, while stockpiles of non-durable goods were up 0.5% to $307.8 billion, the report said.

Inventories of retail goods declined by 0.6% in January, but clothing stores reported a 0.9% increase in unsold products, it said.