Inventories at U.S. Companies Fall as Sales Rise

[Purveyor]

By Timothy R. Homan

Feb. 12 (Bloomberg) -- Inventories in the U.S. unexpectedly fell in December for the first time in three months as companies couldn’t keep up with increasing demand.

The 0.2 percent decrease in stockpiles followed a 0.5 percent increase the previous month, figures from the Commerce Department showed today in Washington. Sales advanced 0.9 percent after jumping 2.4 percent in November.

A record inventory drawdown last year means companies will need to increase orders as sales improve, setting the stage for a sustained manufacturing expansion. Another report today showed purchases at retailers in January exceeded the median forecast of economists surveyed by Bloomberg News.

“We’re seeing some strength in sales, so inventory gains are on the horizon,” said Kim Whelan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who accurately forecast the December drop. “Inventories will continue to add to growth through all of 2010.”

Economists forecast inventories would climb 0.2 percent, after a previously estimated 0.4 percent gain in November, according to the median of 58 projections in a Bloomberg News survey. Estimates ranged from a decline of 0.4 percent to an increase of 0.7 percent.

Another report from the Commerce Department today showed retail sales climbed in January for the third time in four months, signaling the consumer spending recovery that began in late 2009 continues into the new year.

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