Business Inventories Up 0.4% in January

Stockpiles on company shelves rose more than expected in January, the government said in a report suggesting the soft economy may not rebound as quickly as previously thought. Business inventories rose 0.4% in January to $1.23 trillion after being flat in December, the Commerce Department said. Inventories were up 5.8% from January 2000. Sales of goods were unchanged at $896.60 billion after a mere 0.1% gain in December. With stockpiles increasing and sales flat, the inventory-to-sales ratio rose to 1.37 months’ worth in January, the highest level since a matching 1.37 months’ worth reached in March 1999. The ratio was 1.36 months’ in December and 1.32 months’ in January 2000. The monthly inventories increase was the biggest since October and topped expectations from analysts, who had estimated that inventories rose 0.2% in January. Inventories of durable goods rose 0.6% in January. Stockpiles at car dealers jumped 0.9%. Stockpiles at manufacturers, which account for almost half of all inventories, grew 0.7%. Retailers’ inventories rose 0.6%. The inventory data came less than a week before the Federal Reserve meets to discuss the interest rate outlook. The central bank is expected to cut short-term rates at least a half-percentage point Tuesday.