Ahead Of The Bell: Business Inventories

WASHINGTON (AP) - Businesses likely added to their inventories for a 12th consecutive month in December, signaling further gains in production at U.S. factories.

The consensus of economists is that businesses increase their inventories 0.6 percent in December. The Commerce Department is scheduled to release the new report at 10 a.m. EST Tuesday.

Inventories were up 0.2 percent in November, which had been the smallest gain since last May. But total business sales were up 1.2 percent in November after an even bigger 1.5 percent October increase.

Economists believe inventories will keep rising as long as sales remain strong and businesses have confidence that demand for their products will remain high. The rising demand is encouraging businesses to keep restocking store shelves and this activity has supported increased product at the nation's factories.

The November rise in inventories pushed them to $1.42 trillion, up 7.7 percent from the recent low of $1.32 trillion hit in September 2009.

Strong gains in both inventories and sales over the past year have been good news for many industries, which have been able to boost production and hire more workers.

Manufacturing has been one of the standout performers since the recession ended in June 2009.