WASHINGTON (AP) – Businesses slashed wholesale inventories for a third straight month in November as sales continued to plummet by record amounts, further evidence of the severe recession gripping the country.

The Commerce Department reported Friday that wholesale inventories dropped 0.6 percent in November while sales were down a record 7.1 percent.

Businesses are expected to keep paring inventories in coming months as sales weaken further in the midst of a recession that is already the longest in a quarter century. Many economists do not expect a recovery to begin until the second half of this year.

The 0.6 percent decline in inventories was slightly smaller than the 0.8 percent drop that economists had expected. However, the government revised the decline in October inventories to show a drop of 1.2 percent, even worse than the 1.1 percent fall reported earlier. Inventories fell by 0.4 percent in September.

The string of inventory declines reflected the struggle businesses are having trying to keep stockpiles in line with plunging sales. The 7.1 percent drop in sales at the wholesale level in November was a record, surpassing the old mark of a 4.5 percent drop set in October. The 2.1 percent drop in September wholesale sales had tied a record going back to April 2003.

The economy stumbled badly in the fall after being hit by the worst financial crisis since the Great Depression, prompting businesses to begin slashing payrolls and cutting back on their investment plans.

In a separate report Friday, the Labor Department said that the unemployment rate jumped to 7.2 percent in December as businesses slashed 524,000 jobs. For all of 2008, the economy lost a net total of 2.6 million jobs, the worst showing since 1945.

The inventory report showed that the ratio of inventories to sales rose to 1.25 in November, the highest level since April 2003. Wholesale inventories are goods held by distributors who generally buy from manufacturers and sell to retailers. They make up about 25 percent of all business stockpiles.

The worry is that continued declines in sales will prompt further cutbacks in production which will mean more job layoffs in the months ahead.

On Thursday, the nation’s retailers reported dismal sales results for December, confirming fears that the holiday season was the weakest since at least 1969. Even Wal-Mart Stores Inc., which had been one of the few retailing bright spots, reported smaller gains than economists had been expecting.

Among the retailers reporting big declines were Sears Holdings Corp., which operates Sears and Kmart stores, luxury retailer Saks Inc. and Gap Inc.

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