- The Washington Times - Monday, November 17, 2003


America’s businesses — which have been keeping supplies fairly lean — boosted their stockpiles of unsold goods in September for the first time in six months, a sign that companies may be feeling more confident about the economic recovery’s staying power.

The Commerce Department reported yesterday that business inventories rose by 0.3 percent in September, a turnaround from the 0.4 percent drop reported in August. September’s rise was the first since March, when businesses also increased their supplies at warehouses and back lots by 0.3 percent.

Economists were expecting inventories to be flat in September.

“With inventories swinging over to now showing increases, a watershed has been reached,” declared an optimistic Ken Mayland, president of ClearView Economics. “Inventories will be a major part of the 2004 economy story, along with a capital-spending boom and swelling exports.”

In another encouraging sign, the increase in inventories in September came even as sales rose by a solid 0.6 percent, the biggest gain since July. That marked an improvement over the 0.3 percent decline registered in August.

With the economy improving, economists are hopeful that businesses will feel more certain about the sustainability of the economic resurgence and will ramp up inventories, a development that would boost economic growth.

After a long capital investment drought, businesses are slowly increasing spending and adding jobs, two crucial ingredients that must continue for the economic recovery to be lasting, economists say.

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