Businesses Cut Inventories For 13th Straight Month

MARTIN CRUTSINGER

WASHINGTON (AP) — Businesses slashed inventories for a 13th consecutive month in September although the pace of reductions slowed from the previous month. The economic rebound is expected to remain tentative until businesses switch to rebuilding their stockpiles.

The Commerce Department said Monday that businesses reduced inventories 0.4 percent in September. That's slightly better than the 0.7 percent drop economists expected and much improved from a 1.6 percent decline in August.

Sales also fell 0.3 percent in September, the first setback since May.

Still, businesses soon may begin restocking depleted store shelves after more than a year of cuts. If that occurs, factory production will begin to rise on a sustained basis, helping to bolster a broad recovery from the worst recession since the 1930s.

The ratio of sales to inventories held steady in September at 1.32. That means that it would take 1.32 months to deplete stockpiles at the September sales pace.

The September decline reflected a 1 percent drop in inventories held by manufacturers and a 0.9 percent fall in stockpiles held by wholesalers. Retail inventories rose 0.6 percent.