/www.bloomberg.com/ By Carlos Torres
Washington, (Bloomberg) -- U.S. wholesale inventories rose in November for the fifth time in the last six months, led by increases in autos and metals, government figures showed.
Inventories were up 0.2 percent to $284.5 billion after falling a revised 0.5 percent in October, the Commerce Department said. Inventories had been rising since June. Sales gained 1.2 percent, the biggest increase in seven months, to $235.7 billion.
Companies are rebuilding inventories as rising consumer spending has run down stockpiles. Increased production by manufacturers to replenish shelves may help underpin growth in coming months. OfficeMax Inc., the No. 3 U.S. office-supply retailer, had the best holiday season in three years, helping it to keep inventories lean. President George W. Bush this week outlined his plan to spur the economy.
``Just about everyone is trying to keep stocks as low as they can,'' said Mark Vitner, a senior economist at Wachovia Securities Inc., in Charlotte. He said uncertainty about a prospective war in Iraq and other concerns are holding down demand and production. ``If we move past these events,'' he said, ``we could see that orders and output come back much stronger than people think'' because stockpiles are so lean.
The strength in demand pushed the inventory-to-sales ratio, a measure of the time goods sit unsold on store shelves, to a record- low 1.21 months' worth in November. The previous low was 1.22 in October, based on comparable Commerce Department records back to 1996.
Jobless Claims
Separately, the Labor Department reported that the number of U.S. workers filing new claims for state unemployment benefits last week fell below 400,000 for the second time in the past three weeks, indicating that the worst stretch of firings may have passed. Initial jobless applications decreased by 19,000 to 389,000 in the week that ended Saturday, down from 408,000 the previous week.
U.S. Treasury securities fell after the claims report. The benchmark 10-year note maturing in November 2012 declined 1 1/4 points, pushing the yield up 16 basis points to 4.18 percent. A basis point is 0.01 percentage point. The jobless figures helped buoy stocks. The Standard & Poor's 500 Index gained 17.64 points, or 1.94 percent, to close at 927.57, and the Dow Jones Industrial Average rose 180.87 points, or 2.1 percent, to close at 8776.18.
Economists had expected wholesale inventories to rise 0.2 percent, based on the median of 23 forecasts in a Bloomberg News survey, after an initially reported 0.3 percent drop in October. They had also expected sales to rise by 0.3 percent.
Factory Inventories
Wholesalers account for about one-fourth of all business inventories. Retailers and factories account for the rest. The Commerce Department reported this week that factory inventories fell 0.3 percent in November, the second straight decline, as sales fell 0.8 percent. Retail inventory statistics will be available Jan. 15, when the government releases its report on all business stockpiles.
Stockpiles of durable goods at wholesalers, which include autos and metals, rose 0.3 percent in November after declining 0.1 percent the previous month, today's report showed. Supplies of autos rose 2.3 percent, and of metals, 1.1 percent. Sales of durables gained 0.7 percent after dropping 1 percent.
Inventories of non-durable goods increased 0.1 percent, led by farm products, paper and chemicals, after dropping 1 percent in October. Sales of non-durable goods jumped 1.6 percent after rising 1 percent.
OfficeMax Sales
OfficeMax said last month that sales at stores open at least a year rose more than 10 percent between Thanksgiving and Christmas, led by electronics such as digital cameras.
``Our inventory position is the best it's been in years, and we'll finish right on line with inventory,'' said Michael Feuer, the company's chief executive, in an interview last month.
The process of rebuilding inventories is likely to add to economic expansion this year.
``Certainly over the course of the year ahead there is plenty of room for inventories to add to growth because they are so lean already,'' said James O'Sullivan, an economist at UBS Warburg LLC in Stamford, Connecticut. ``We will probably start to see signs of inventory building fairly soon.''