Tuesday, February 9, 2010
Reduced Inventories Reveal Pessimitic Firms
In the month of December, companies reduced their inventories by 0.8% however sales increased 0.8% in the same month. The reduction of inventories shows that companies may still be hesitant to buy in that the economy is on the rebound. Retailers are waiting to fully trust the economy again to keep their stocks at full capacity
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Retailers would probably not want unsold stock and hence they are just being realistic. The increase in sales by 0.8% shows that people are spending money and buying goods. Even though the increase is only a small percentage, we can be optimistic.
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