Wholesale Inventories, Initial Jobless Claims Fall Significantly

Two more reports released on Thursday appeared to offer more evidence that the U.S. economy may be turning the corner, as wholesale inventories declined again in November, while initial jobless claims fell by 58,000 last week.

The Commerce Department said that wholesale inventories declined 1.1% in November, the sixth consecutive month it has shrunk. That was more than double the decrease expected by analysts, Bloomberg reported.

Commerce said wholesale inventories totaled $290.4 billion in November, the lowest level since February 2000. Sales totaled $223.6 billion, the same as in October.

Declining inventories should eventually force businesses to order more products, which would increase the demand for trucking.

Also Thursday, the Labor Department said that 395,000, the number of U.S. workers filing new claims for unemployment benefits fell to 395,000, lowest level in three weeks. Analysts told the Associated Press this may mean the huge wave of layoffs triggered by the recession and the terrorist attacks is abating.

However, AP said the large drop may have been influenced by a decision by newly laid off workers in California to delay filing for benefits until after Jan. 6. That is the date a new California law went into effect, raising the maximum weekly benefit to $330 from $230.

Still, the four-week moving average for claims, which helps smooth out weekly variations, fell to 410,500, the lowest level since the week of Sept. 15.

The drop in inventories pushed down the inventory-to-sales ratio, a measure of the time goods sit unsold on store shelves, to 1.30 months in November, from 1.31 months in October.

Analysts told Bloomberg that moving excess inventory is necessary before increasing production. This report continues to show that progress is being made in that effort, which could help end the recession.

And the Wall Street Journal reported Thursday that more than half of the economists surveyed by Blue Chip Economic Indicators said the recession will be over by the end of February (click here for the related story).

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