Inventories Rise in Nov.; New Jobless Claims Fall

Wholesale inventories rose in November and the number of workers filing new claims for state unemployment benefits fell for the second time in three weeks, indicating that the worst stretch of firings may have passed, government figures showed Thursday.

Inventories were up 0.2% to $284.5 billion after falling a revised 0.5% in October, the Commerce Department said. Inventories have been rising since June. Wholesale sales gained 1.2%, the biggest increase in seven months, to $235.7 billion.

Companies are rebuilding inventories as rising consumer spending has depleted stockpiles. Increased production by manufacturers to replenish shelves may help underpin growth in coming months.

“Just about everyone is trying to keep stocks as low as they can,” said Mark Vitner, a senior economist at Wachovia Securities Inc. in Charlotte, N.C.

He said uncertainty about war with Iraq and other concerns are holding down demand and production. “If we move past these events,” Vitner said, “we could see that orders and output come back much stronger than people think” because stockpiles are so lean.

The strength in demand pushed the inventory-to-sales ratio, a measure of the time goods sit unsold on store shelves, to a record-low 1.21 months’ worth in November. The previous low was 1.22 in October, based on comparable Commerce Department records back to 1996.

Separately, the Labor Department reported that the number of U.S. workers filing new claims for state unemployment benefits last week fell below 400,000 for the second time in the last three weeks. Initial jobless applications decreased by 19,000 to 389,000 in the week ended Saturday, down from 408,000 the previous week.