Business inventories rose a seasonally adjusted 0.7 percent or $2.5 billion in February, but companies were selling their goods at a faster rate than the previous month. the Commerce Department reported yesterday.
Overall, inventories reached a seasonally adjusted $338.25 billion in February from $225.76 billion in January. The department revised the January figure upward to a 0.9 percent increase over December from the 0.7 percent gain reported earlier.
But total business sales increased 3.5 percent to a seasonally adjusted $236.62 billion following a 3.2 percent decline in January to $228.61 billion.
In February, manufacturers' inventories rose 0.9 percent or $1.5 billion to an adjusted $179.53 billion following a 0.7 percent advance in January.
Retail inventories inched up 0.1 percent or $59 million to an adjusted $88.89 billion following a 1 percent increased the month before.
Wholesale stocks spurted 1.2 percent or $843 million to an adjusted $69.83 billion following a 1.5 percent gain in January.
The total stock-to-sales ratio at the end of the month was 1.43 compared with 1.47 for January and 1.45 for February.
That means businesses had $1.43 of goods on hand for every $1 they sold. The declining ratio means businesses are selling products faster than they are accumulating them and are likely to expand production to replace products they sell.