A 26% rise in farm products, as well as big increases in petroleum and chemical inventories, led a huge 2.2% rise in wholesale inventories in October. Similar increases in farm and petroleum sales resulted in a strong 1.9% rise in overall sales. But the jump was most likely due to rising prices, which raised the value both inventories and sales.
Still, durables on hand increased a modest 0.5%, while sales grew a stronger 0.9%, indicating that production and demand remain on an upward path.
Meanwhile, the inventories-to-sales ratio held at a lean 1.18, which means that at the current sales pace it would take 1.18 months to liquidate all stockpiles.
With demand rising, we will probably see further increases in production, which should help to support the economic recovery through the end of the year and into 2011.
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