JANUARY 16, 10:50 EST Inventories Up, Sales Down in Nov. By JEANNINE AVERSA Associated Press Writer WASHINGTON (AP) — Inventories at U.S. companies grew briskly in November while sales fell for the second month in a row, further evidence of a weakening economy. Stockpiles of goods on shelves and backlots nationwide rose by 0.5 percent to a seasonally adjusted $1.22 trillion, the Commerce Department reported Tuesday. At the same time, business sales declined by 0.3 percent to $896.3 billion. In October, inventories also rose sharply, by 0.7 percent, and sales dropped by 0.5 percent, according to revised figures. The October and November performances suggest that as the economy slowed rapidly, slackening demand lead to the pileup of goods. The last time that businesses' sales fell two months in a row was in July and August of 1998. The inventory-to-sales ratio, which measures how long it would take businesses to exhaust their inventories rose to 1.36 months in November, the highest since April 1999. The weakening economy has been demonstrated in a spate of troubling reports in recent weeks. Manufacturing activity has fallen, consumer confidence has declined, holiday sales were disappointing and a number of the country's biggest names, from Sears to Office Depot, have announced thousands of layoffs as they shut unprofitable stores. Automakers, which saw their sales fall last month, also are temporarily shutting down plants to trim excess inventories in response to weakening demand. On Wall Street, earnings worries kept stocks struggling. The Dow Jones industrial average was up 27 points in morning trading, recovering from an earlier dip. The Nasdaq was down 35 points. Worried that the economy is slowing too quickly and could slip into a recession, the Federal Reserve on Jan. 3 unexpectedly slashed short-term interest rates by half of a percentage point. President-elect Bush, who has repeatedly expressed concern about the weakening economy, has said more needs to be done to protect against a serious downturn, notably congressional passage of his $1.3 trillion across-the-board tax cut. In cutting interest rates, the Fed acknowledged that it may have gone too far in reining in economic growth through interest-rate increases between June 1999 and May 2000. In November, retailers' inventories rose 0.5 percent to $398 billion, following a 0.9 percent increase the month before. Retailers' sales, however, fell by 0.5 percent in November $271.2 billion after a 0.1 percent dip the previous month. Inventories at factories rose 0.5 percent in November to $494.5 billion, after a 0.7 percent rise. But manufacturers' sales in November declined by 0.4 percent to $374.1 billion on top of a sharp 1.2 percent decline in October. The manufacturing sector has been feeling the pinch of the economic slowdown. In December, manufacturing activity fell to its lowest point since 1991. Factories lost 180,000 jobs in 2000. At wholesalers, inventories for the second month in a row rose by 0.4 percent to $328.9 billion. Sales for November were flat at $251 billion, following a 0.1 percent decrease in October. _______________________________________________ Crashlist website: http://website.lineone.net/~resource_base
