Inventory for U.S. Businesses Drop in December

Inventory-to-sales ratio dropped for U.S. businesses for the first time in three months, according the the Commerce Department report.

After inventories rose in October and November, December found business inventories dropping by a mild 0.2 percent, largely led by the auto industry.

Although sales showed an increase in December of 0.9 percent, that doesn't include changes in price, so it's not that reliable of an indicator.

About a year ago the inventory-to-sales ratio had increased to 1.46 as sales continued to plunge. Now it stands at 1.26 as of December, below the pre-recesson level averages of 1.28.

What this means is all that extra inventory from lack of sales which had been sitting around has finally been moved a little, resulting in the lower inventory-to-sales figures.