U.S. business inventories held on shelves and backlots rose in November by 0.4 percent, the biggest gain since August 2006, the Commerce Department reported Friday.

The November gain followed a smaller increase of 0.2 percent in October, reflecting a 0.2 percent rise in stockpiles being held by manufacturers and a 1.3 percent advance in wholesale inventories.

Those increases were offset by a decline of 0.3 percent in inventories being held by retailers.

The 0.4 percent gain in business inventories came as business sales in November were up 0.5 percent from October and up 4 percent from the same month of 2005.

The total business inventories-to-sales ratio at the end of November was 1.30, compared to 1.27 in the same month of the previous year. The ratio is a measure of how long it would take to deplete stocks at the current sales pace.

Rising business inventories are seen as a sign of confidence in future demand or as a result of an unexpected decline in sales.

Source: Xinhua