November inventories fall at fastest pace in 7 years

WASHINGTON (Reuters) - Business inventories fell at their steepest pace in seven years in November, while sales plunged by a record 5.1 percent , a Commerce Department report showed Wednesday, highlighting the deepening economic slump.

Inventories fell 0.7 percent, the biggest decline since November 2001, when they dropped 1.1 percent. Inventories dropped by an unrevised 0.6 percent in October.

Analysts polled by Reuters had forecast business inventories to fall 0.5 percent in November.

Sales tumbled a record 5.1 percent in November after a falling by a revised 3.9 percent in October, which was previously reported as a 3.5 percent decrease.

That took the inventories-to-sales ratio, which measures how long it would take to empty shelves at the current pace of sales, up to 1.41 months' worth, the highest reading since September 2001, when the ratio was 1.44 months' worth.

This compared with an inventories-to-sales ratio of 1.34 months' worth in October.

From November 2007, business inventories were 3.3 percent higher, while sales retreated by 8.9 percent, the Commerce Department said.

(Reporting by Lucia Mutikani, Editing by Andrea Ricci)