American businesses posted another increase in their inventories in December but the stock building still wasn't excessive, according to new figures published by the Commerce Department.
The agency's monthly statistics showed overall business inventories up $1.9 billion, or 0.4 percent, in December following a jump of $3.19 billion, or 0.8 percent, in November.
However, the rise was more than off-set by higher sales volume, and the closely watched inventory-to-sales ratio remained essentially unchanged, indicating that stockbuilding hasn't yet reached troublesome proportions.
Economists begin to worry when inventory-building becomes excessive because inbalances in this area can help exacerbate an economic down-turn if a recession comes. Excess accumulation worsened the 1974-75 recession.
Inventory building was rapid in the first half of 1979, but it slowed markedly toward the end of the year. Total business stocks equaled 1.41 months' sales in December down from 1.42 the previous month.
The inventory pattern among individual sectors of the economy was mixed in December. Retail inventories fell 1.1 percent, largely because of sales incentive programs by the major auto companies designed to work off excess stocks.
Manufacturers' inventories rose 0.8 percent in December to $228.08 billion, following a 1.2 percent jump in the previous month. Wholesalers' stock-building rose 1.3 percent compared with a 0.2 percent rise in November.
Overall business sales in December rose $2.09 billion, or 0.7 percent, to a seasonally adjusted $301.35 billion. In November they edged up 0.1 percent, or $179 million, to a seasonally adjusted $299.26 billion.
On an unadjusted basis, overall business inventories rose 1.4 percent to $305.61 billion. Inventory levels on this basis were up 10.7 percent from the same period 12 months before.