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October business inventories up 0.3%
December 13, 2005: 11:40 AM EST


Smaller-than-expected increase keeps inventories at historically lean levels

WASHINGTON (Reuters) - Business inventories rose a smaller-than-expected 0.3 percent in October, remaining at historically lean levels, a Commerce Department report said Tuesday.

Wall Street analysts polled by Reuters had forecast a 0.5 percent rise in inventories compared with the 0.5 percent gain recorded in September.

Sales at retailers, wholesalers and manufacturers outpaced the rise in stocks, increasing 0.8 percent in October. That kept the inventories-to-sales ratio, a measure of how long it would take to deplete stocks at the current sales pace, at a record low 1.25 months.

At a more detailed level within the report, retail inventories rose 0.1 percent in October while retail sales advanced 0.3 percent. Inventories at motor vehicle and parts dealers rose 0.7 percent in October after growing 2.3 percent in September.

America's auto industry has suffered sharp swings in demand as car makers used deep discounts to boost purchases over the summer, only to see sales fade as these inducements were reduced.

The motor vehicle inventories-to-sales ratio widened slightly to 2.08 months in October from 2.04 months in September.


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