US August business inventories rise, sales plunge

The sales plunge of 1.8 percent was the largest since a 2.1 percent decline in September 2006 and helped push the inventories to sales ratio, which measures how long it would take to empty shelves at the current pace, up to 1.27 months' worth, the highest since February.

Wall Street analysts polled by Reuters had expected business inventories to rise 0.5 percent, after they rose an unrevised 1.1 percent in July.

Retailers, which hold about one third of business inventories, saw their stocks fall 0.6 percent in August, while sales slipped 0.5 percent.

From August 2007, business inventories rose 6.4 percent and were outpaced by sales, which increased 6.7 percent, the Commerce Department said.