WASHINGTON — Business inventories fell 0.4% in August, the biggest decline in 17 months, as stockpiling failed to keep pace with a surge in sales, the government reported today.
The Commerce Department said that the value of goods on shelves and back lots dipped to $577.9 billion in August following a 0.1% July increase. The decline was the sharpest since a 0.6% drop in March, 1983.
The big August decline in inventories could signal that businesses are finally working through a backlog and will begin placing new orders. Those orders could translate into increased production and rising employment.
The drop in inventories came as sales soared in August, advancing by 1.6% after a 1% July increase. The gain left sales at $429.1 billion in August.