Ahead of the Bell: US business inventories
WASHINGTON (AP) — The Commerce Department reports on business stockpiles in November. The report will be issued at 10 a.m. EST Wednesday.
STOCKPILES UP: The expectation is that stockpiles rose modestly in November. Economists at JPMorgan Chase are predicting a 0.2 percent gain.
STOCKPILES AND SALES: In October, U.S. businesses boosted stockpiles by 0.2 percent, a slowdown from September, as sales were weak for a third straight month.
While businesses could start cutting back if sales don’t improve, economists expect a rebound in stockpiling in coming months. That would be good for the economy because more orders to fill empty shelves should translate into increased factory production and stronger economic growth.
A major reason for the optimism has been the improvement in the job market. The economy added nearly 3 million jobs in 2014, the strongest job growth since 1999. The hiring gains mean more people working and rising incomes which should boost consumer spending, which accounts for 70 percent of economic activity.
Many analysts believe the economy will grow by 3 percent in 2015, which would be the strongest annual gain in growth in a decade.