Businesses adjust supply chains as inventories grow at tepid rateThe U.S. Commerce Department released its assessment of business inventories in the month of October and inventories rose less than forecast, brought down by plunging retail stockpiles as merchants had trouble satisfying burgeoning consumer demand.

October sales mounted a 1.4 percent climb that registered as the biggest gain in seven months. The decline in inventories was led by retailers, who reported a 0.6 percent fall in October while their sales rose 1.8 percent. In November, the Commerce Department reports that retail purchases shot up 0.8 percent; however, prices paid to producers also grew by the same percentage as companies absorbed the higher costs of gasoline, heating oil and fruit.

In order to ensure that supply chains function as smoothly as possible, it is necessary for companies to scrupulously monitor their inventories. As the economy gathers steam, some companies, like Macy's, are beginning to add goods to their inventories as they expect consumer spending to continue throughout the holiday season.

Macy's chief executive officer, Terry Lundgren, affirmed to Bloomberg that the company "feels great about our inventory position," asserting that their supply chain is "really targeted in certain categories." While not all encouraging, the latest statistics indicate that the U.S. economy is growing and that companies are adjusting their supply chains to meet the shifting demand.
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