U.S. businesses reduced inventories in December by the largest amount in seven years as they dealt with tumbling sales in a weak holiday shopping season. The Commerce Department reported Thursday that business inventories fell 1.3 percent in December, significantly worse than the 0.9 percent decline expected by economists. It was the largest reduction since the record 1.5 percent cut in October 2001. December also was the fourth consecutive month that businesses reduced their inventories, matching a similar period of reductions that ended in August 2003. The trend has sparked concerns that the economic slump will gain intensity if businesses continue to reduce inventories, possibly triggering further reductions in production and more job losses.
