Was the increase in inventories in january an indicator

Reference no: EM131023306

According to an article on the U.S. economy in March 2013: "Businesses are restocking after a cutback in the pace of inventory building in the fourth quarter that weighed on economic growth." The article further notes that: "Inventories in the U.S. rose in January by the most since May 2011 as companies replenished warehouses and shelves amid signs demand will pick up." Why would a cutback in the pace of inventory building in the fourth quarter slow down economic growth? Was the increase in inventories in January an indicator that economic growth would increase or decrease in the following months? Briefly explain.

Reference no: EM131023306

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