Wholesale inventories rose a very sizable 1.6 percent in October against a strong but less sizable 0.9 percent rise in wholesale sales, driving up the wholesale stock-to-sales ratio by one tenth to 1.16. Inventories of farm products and energy products both show sizable increases in the month as do inventories of metals and electrical goods. On the sales side, the month shows strong gains for farm products, autos, and furniture.
Data on factory inventories, released with Monday's factory orders report, show a 0.9 percent build for October which together with today's 1.6 percent wholesale build point tentatively to an increasing total inventory build for the fourth quarter, a result that would add to GDP but, given the uncertain outlook for demand, could make businesses more cautious in equipment and labor investment. Inventories are best when they're a little bit lean, which is a plus for customer orders and which keeps businesses confident in their operations and outlook. Inventory data on the retail sector will be released on Tuesday with the business inventories report.