Business Stocks Reflect Sluggish Sales

Businesses built up their stocks in July at the slowest pace in seven months, accommodating sluggish sales.

The Commerce Department said Monday that stocks in factories and stores rose in July for the 16th straight month. But the 0.3 percent gain was the smallest since an identical gain in December and was less than analysts expected.

“This is pretty good news in terms of the economy. It does suggest accumulation is slowing,” said James Annable of the First National Bank of Chicago. “But it puts another nail in the coffin of an interest-rate cut.”

Annable said the Federal Reserve probably welcomes the inventory slowdown, anticipating that consumer demand will be adequate to match factory production.