US business stockpiles rise at faster pace in December as sales growth slows

The Associated Press

FILE - In this Friday, Dec. 13, 2013, file photo, Nathan Pritchard, with Toys R Us, shows a variety of K'Nex toys on display at the store in Lafayette, Ind. The Commerce Department releases business inventories for December on Thursday, Feb. 13, 2014. (AP Photo/Journal & Courier, John Terhune) NO SALES

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WASHINGTON (AP) — U.S. businesses restocked their shelves and warehouses at a faster pace in December, but sales slowed, a cautionary sign for the economy.

The Commerce Department says inventories rose 0.5 percent after a 0.4 percent increase in November. Sales growth fell to just 0.1 percent, from 0.7 percent in November.

The figures point to a risk for the economy: if companies build their stockpiles at a faster pace than their sales are growing, they may end up stuck with more goods than they need.

That would force them to cut prices sharply and sell at discounts in order to clear the extra inventory. It would also cause businesses to order fewer goods, weighing on factory production.

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