Ahead Of The Bell: Business Inventories

WASHINGTON (AP) — U.S. businesses likely slashed inventories for a 14th consecutive month in September, although sales have been rising.

Amid other signs of life in the economy, businesses soon may begin restocking depleted store shelves after more than a year of inventory cuts. If that occurs, factory production will begin to rise and help bolster a broad recovery from the worst recession since the 1930s.

Inventories are expected to fall 0.6 percent in September, according to economists surveyed by Thomson Reuters. Stockpiles fell a more-than-expected 1.5 percent in August, and dropped 1.1 percent in July, slightly larger than the 1 percent initially estimated.

But sales by manufacturers, wholesalers and retailers rose 1 percent in August, reflecting a big boost from the government's Cash for Clunkers program in August. It was the third straight increase in sales.

The Commerce Department is scheduled to release the September report Monday at 10 a.m. EST.

The ratio of sales to inventories declined to 1.33 in August, from 1.36 in July. That meant it would take 1.33 months to exhaust inventories at the August sales pace, slightly higher than August 2008 inventory to sales ratio of 1.30.