WASHINGTON, Dec. 14 (Xinhua) -- U.S. business inventories and sales both edged up in October, and the ratio of total business inventories to sales increased as well, according to the data released by U.S. Census Bureau on Friday.
The combined value of distributive trade sales and manufacturers' shipments for October was 1,469.9 billion U.S. dollars, which was 0.3 percent higher than the reading for September. Over the year, the reading rose 6.1 percent.
Manufacturers' and trade inventories were at a value of 1,982.2 billion U.S. dollars at the end of October, which was 0.6 percent higher than previous month. Meanwhile, the reading rose 5.2 percent from October 2017.
According to the bureau, the ratio of total business inventories to sales at the end of October was 1.35, which was slightly higher than the reading of 1.34 in September. Over the year, the reading was 1.36.
For manufacturers, the ratio of inventories to sales remained flat at 1.34 at the end of October from the previous month. However, it was lower than the reading of 1.37 for the same period a year ago.
For retailers and merchant wholesalers, the ratio of inventories to sales for October was unchanged from a year ago.
The ratio of inventories to sales is an indicator that has strong relationship to business cycle. A spiking reading indicates that firms are accumulating a stockpile of goods while the sales couldn't keep up the pace, which puts more pressure on businesses' financial status.
