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Over the last two years, U.S. businesses have been slowly but steadily depleting their stocks of inventories—but in the next few quarters that is set to change.
Though 2016 brought much that was unexpected to the global economic and political landscape, many of the risks that were looming over the near-term outlook have receded.
With a breakout performance by the U.S. economy looking unlikely, business inventories are still running lean—but stimulative policies could provide a boost.
Congress and the White House are likely to implement a modest pro-growth agenda, encouraging continued consumer confidence and economic growth for the next few years.
After an unexpected buildup in 2015, U.S. business inventories dipped in the second quarter of 2016—the first contraction since 2011. Inventories should start to grow again before the end of the year.