Tuesday, April 15, 2003

Unsold items piling up

By Jeannine Aversa
The Associated Press

WASHINGTON - Businesses' stockpiles of unsold goods rose in February as sales tumbled amid prewar jitters. But more forward-looking economic data suggest that consumers' haven't lost their appetite to spend - encouraging news for businesses and the economy.

The Commerce Department reported Monday that business inventories went up by 0.6 percent in February, compared with a 0.3 percent rise in January.

Businesses' sales, meanwhile, dropped by 1 percent in February, the biggest decline since November 2001. That erased part of January's 1.3 percent gain.

The report highlighted one of the big challenges facing businesses during these muddled economic times: trying to gauge consumers' demand for their products.

The Business Roundtable, an advocacy group of chief executive officers from some of the United States' largest companies, in a survey last week found that consumers' uneven appetites for spending is among their top concerns.

Even with their ups and downs, consumers have been the main force keeping the economy going.

Profit-pressed businesses and battered manufacturers have been reluctant to make big investments in capital projects or in hiring, a major factor holding back the economic recovery. Turning that situation around may take time, even with a swift military victory in Iraq, some economists say.

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