Reply #5: Read that again please. [View All]

[Frodo]

Anytime inventories rise without a similar rise in sales,the business is not growing revenue and is losing money in trapped inventories.

That is a (generally) true statement. The problem is that it does not represent the current situation. Since the inventory/sales ratio actually decreased with this report, we know that sales increased by MORE than the amount inventories increased.
Both wholesale and business inventory reports, while normally unimportant) were high enough to boost expectations for the 1st Quarter GDP. Of course NOW that means more evidence of the need to raise rates to fight inflation and could mean a market dip. We'll see.

A couple quotes.

Inventory rebuilding will provide a welcome boost to 2004 production given lean supply and strong demand.

Sales growth has exceeded inventory growth since June to leave a continued downward trend in I/S ratio.

Inventory growth will have to accelerate shortly as record low I/S ratio risks lost sales.
2004 production boosted not only by strong sales (demand) but the clear need for inventory rebuilding.