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Inventories held by U.S. businesses rose for a 10th consecutive month in October as companies saw sales increase by the largest amount in seven months.

Business inventories increased 0.7 percent in October after a revised 1.3 percent rise in September, the Commerce Department reported Tuesday. October sales jumped 1.4 percent, the biggest advance since a 2.5 percent rise in March.

Continued strong gains in inventories and sales are viewed as encouraging signs for the economy.

Many businesses had undertaken a massive liquidation of inventories in early 2009 as they struggled to keep costs under control during the recession. The swing from slashing inventories to rebuilding stockpiles has provided support for growth beginning in the final three months of 2009 _ just months after the recession officially ended in June 2009.

For October, the 0.7 percent rise in total inventories reflected a 0.9 percent increase in inventories held by manufacturers and a 1 payday lenders.9 percent rise in inventories held by wholesalers. Inventories at the retail level dropped 0.6 percent, but that mostly because of a strong month for auto sales.

The 1.4 percent rise in sales showed strength at all points in the supply chain. Sales by manufacturers rose 2.2 percent with smaller gains posted by retailers and manufacturers. A separate report Tuesday showed that retail sales increased sharply in November.

Total inventories climbed to $1.42 trillion in November, increasing 7.5 percent from the lowpoint for stockpiles of $1.32 trillion reached in September of 2009.

The ratio of inventories to sales stood at 1.27 in October. That means it would take 1.27 months to deplete stockpiles at the October sales pace. That was down from 1.28 months in September.

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When Macy’s Inc. closed its Midwest headquarters in downtown St. Louis a couple years ago, it left tens of thousands of square feet of office space vacant in the city’s historic Railway Exchange Building low fee pay day loans.

Now an effort is underway to convert some of that space into a fashion incubator. The details are still being hammered out

As the heavily armed Nigerian soldiers slipped closer to a suspected militant camp in the country’s oil-rich southern delta, they were ready for a fight after suffering casualties only days earlier.

They launched a massive attack, including aerial bombings, that was aimed at finding a wanted militant. Civilians caught in the middle tried to escape with their lives, human rights activists say.

As many as 150 people died in the fighting Wednesday and subsequent raids around Ayakoromor, a village lacking mobile phone reception and only accessible via the Niger Delta’s maze of winding creeks, activists say. However, the military says it fired only after being fired upon.

Still, the violence represents yet another example of how those toiling in poverty in a region that makes billions for Nigeria find themselves caught between a military seeking revenge and power-hungry militants.

“In this country, we have only two classes of being,” said Casely Omon-Irabor, a lawyer representing the hunted militant John Togo. “The oppressed and the oppressor.”

The attack around Ayakoromor, a small village in Delta state, included heavy machine gun blasts from Navy vessels and bombing runs by military aircraft. However, the region’s main military commander in the fight against militants denied Saturday that any civilians died in the recent assaults, while acknowledging soldiers opened fire on the shoreline of the civilian village after reportedly being shot at.

“We were taken aback by the volume of fire that was brought to bear on the troops when we approached Ayakoromor on the way to John Togo’s camp,” Gen. Charles Omoregie told journalists at a news conference. “Soldiers had to fight their way into the camp.”

Omoregie said homes in the village burned after ricocheting rifle rounds exploded gasoline and kerosene canisters.

Those with family in the village, like engineer Yeigagha Henry, offered a different account. Residents able to escape the village told him his 76-year-old father died at the hands of the soldiers.

“They set the house ablaze,” Henry calmly recounted Saturday in the nearby city of Okwagbe. “He died inside.”

A list compiled by Oghebejabor Ikim, national coordinator for the Warri-based Forum of Justice and Human Rights Defense, identified 18 of the dead. Ikim said residents told him that soldiers burned down the local customary court and a maternity ward, as well as many homes in the area.

Access to Ayakoromor remained tightly controlled by the military Saturday. Officials with the Nigerian Red Cross made it inside, but a military commander blocked two journalists working for The Associated Press from entering the village, citing a security risk.

Violence in the area also may be continuing. Soldiers manning a boat landing in Okwagbe speaking in the Hausa language said someone suffered injuries Saturday. A commander ordered guards to avoid bringing the injured person past waiting journalists.

Militant and military attacks are nothing new to the Niger Delta, a region of creeks and mangroves about the size of South Carolina. The attacks from an insurgency that began in 2006 cut drastically into crude production in Nigeria, an OPEC-member nation that is one of the top suppliers of crude oil to the U.S.

Production has risen back to 2.2 million barrels of oil a day, in part because many militant leaders and fighters accepted a government-sponsored amnesty deal last year.

But as militants over the years profit from kidnapping and oil theft, the military has launched several reprisal massacres against villages. Often, civilians find themselves caught in the middle of a war over oil they never profit from.

Instead, they eek out a living in petty trading, fishing and subsidence farming as their children attend classes in rundown schools with rusting corrugated roofs and clinic cabinets remain barren of needed anti-malaria drugs.

“What they get as the dividends of democracy, what they get as part of oil revenue is human slaughter,” said Anyakwee Nsirimovu, the executive director of the Institute for Human Rights and Humanitarian Law in Port Harcourt. “It’s unacceptable and I think children and young people who watch their parents die and their houses get burned down will find a way of fighting back.”

Meanwhile, both militants and the military find it lucrative for violence to continue _ especially when it comes to the large-scale oil theft that plagues the foreign oil firms working in the region. That stolen crude, easily refined, fetches top dollar on the black market. But in order for the oil to leave the country, security agencies patrolling the delta must let container ships slip away unstopped.

Between oil theft, amnesty program cash payouts and additional combat pay offered to soldiers in the region, Nsirimovu said only the civilians get left out _ until the violence comes.

“People who profit from the violence in the Niger Delta would not want that violence to end,” he said.

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Australian credit unions and building societies can be a “strong competitive force” against banks, helping to cut borrowing costs, Treasurer Wayne Swan said in his weekly economic note.

The government wants a “new pillar,” in the industry, Swan said earlier in an interview yesterday with Channel Nine. Commonwealth Bank of Australia, Westpac Banking Corp., Australia & New Zealand Banking Group Ltd., and National Australia Bank Ltd., dubbed the four pillars after a law preventing takeovers among them, accounted for 87 percent of the home lending market in September, up from 76 percent three years ago.

“We know there is more work to be done to build up competition, and we are determined to do that,” Swan wrote in his note yesterday. “I’m also a really big believer in the capacity of our mutual credit unions and building societies to be a strong competitive force in the banking sector.”

Australia’s biggest banks have been criticized for raising borrowing costs by more than the central bank. Swan said his government’s package to encourage competition will be released next month. Opposition Shadow Treasurer Joe Hockey will call for a review of the banking industry today, he said in an interview with the Australian Broadcasting Corp yesterday.

The Greens Party on Nov. 15 introduced draft laws to place restraints on the ability of the big banks to increase mortgage rates. The proposals in the lower house of parliament would give the Australian Prudential Regulatory Authority powers to prevent banks from raising mortgage fees above their funding costs.

‘Silver Bullet’

Finance Minister Penny Wong ruled out regulation and said the government will instead focus on supporting competition, according to the transcript of a Sky News interview.

“We’re not pretending that there’s a silver bullet,” Wong said. “We’re not going to re-introduce regulatory regimes, which historically we know have made things worse for Australian consumers and people trying to get home loans.”

Swan urged borrowers to seek loans from credit unions, building societies and smaller banks, which offer more competitive rates. He said the nation’s biggest banks act in an “arrogant way.”

“The government is determined to see a new pillar in the banking system, particularly based on the mutual sector, particularly based on our credit unions and our building societies,” Swan told Channel Nine yesterday. “They are safe and they’re very competitive.”

Competitive Forces

The government has invested A$16 billion ($15.8 billion) in Triple-A rated residential mortgage-backed securities to support smaller lenders and lower the cost of funding, Swan said in his economic note.

Commonwealth Bank reported on Nov. 15 a first-quarter unaudited cash profit of about A$1.6 billion. Westpac, Australia’s second-largest bank, earlier this month posted second-half profit that almost tripled from a year earlier, while ANZ Bank said a week earlier that earnings in the period surged 69 percent to a record. National Australia, the biggest lender to companies, posted a cash profit gain of 32 percent in the second half.

All four raised their standard variable mortgage rates by more than the Nov. 2 quarter-percentage point move by the central bank.

Australia’s Senate voted last month to hold an inquiry into competition in the banking industry, including the fees they charge.

ANZ Chief Executive Officer Mike Smith said Oct. 31 that any attempt by lawmakers to control banks’ interest rates will take Australia back to an era “long since gone.”

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Fewer people applied for unemployment aid last week, the third drop in four weeks.

The Labor Department says initial claims for jobless aid dropped by 24,000 to a seasonally adjusted 435,000. Many Wall Street economists expected a smaller decrease.

If the decline continues, it could signal meaningful improvement in the job market. The four-week average of claims, a less volatile measure, fell 10,000 to 446,500.

That’s the lowest level for the average since the week that ended Sept. 13, 2008, just before the financial crisis intensified that weekend with the collapse of Lehman Brothers.

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Public hearings are set for Tuesday’s Wichita City Council meeting on the creation of three Community Improvement Districts.

The districts would allow developers to collect sales tax revenue to help pay for the cost of their projects.

A Community Improvement District is a special tax zone in which businesses charge a slightly higher tax rate. The revenues generated through the new tax are passed through to a developer who is making improvements in the district.

Tuesday’s hearings will cover proposals for CIDs at three locations:

• Central Park Place Shopping Center, which covers an area surrounding but not including a new Lowe’s home improvement store in the 2600 block of North Maize Road. Developer Brad Saville is seeking a 1 percent sales tax.
• Bowllagio mixed-use entertainment district, which would cover an area on the northeast corner of Kellogg Drive and Maize Road. Development group Maize 54 LLC is seeking a 2 percent sales tax guaranteed personal loan approval.
• A proposed Sav-A-Lot grocery store at Washington Boulevard and Pawnee Avenue in the Planeview area of southwest Wichita. Rob Snyder is the developer of the $2 million project, which is meant to establish a low-cost grocery store in a low-income neighborhood.

Snyder also is proposing that his Sav-A-Lot project be designated as a tax increment financing district. A TIF district would allow Snyder to receive new property tax revenue that the city receives as a result of the new development. Snyder would receive this money on a pay-as-you-go basis, so the city would not need to issue debt for the project. The designation would provide the developer with an estimated $400,000.

The TIF proposal also is on Tuesday’s city council agenda.

The council meets at 9 a.m. Tuesday at City Hall, 455 N. Main.

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Restaurant chain Saladworks has signed a franchise deal that will introduce the company’s salads, soups, wraps and Fusion sandwiches to the Triangle.

Conshocken, Pa.-based Saladworks said in a news release Tuesday that the father-and-son team of Baldev and Unmesh Patel will develop three Saladworks restaurants in Wake County. The company did not specify when or where in the county the restaurants would open.

The Patels are moving to the Triangle from southern New Jersey, where they own and manage locations for Dunkin Donuts, Hampton Inn, Comfort Inn, and Howard Johnson’s, Saladworks spokeswoman Erin Salvadore said No teletrak payday loan. The Saladworks locations will be the Patels’ first franchise locations in North Carolina, Salvadore said.

Saladworks operates more than 100 restaurants in 11 states, and the chain currently has another 60 locations in development.

Entrepreneur Magazine named Saladworks the nation’s top salad franchise for 2009 and 2010.

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The U.S. economy continued to grow during the second quarter, the government reported Friday. But the pace slowed more than economists were expecting, raising concern about growth - or even another recession - in the months ahead.

Gross domestic product, the broadest measure of the nation’s economic activity, rose at a 2.4% annual rate during the three months ended June 30, the Commerce Department said.

The sluggish pace was down from the upwardly revised 3.7% growth rate in the first quarter, and missed economists’ forecast for a 2.5% increase.

Still, the figure marked the fourth straight quarter of growth and gave credence to some economists’ views that the recession that began in December 2007 likely ended at some point in mid-2009.

"This solid rate of growth indicates that the process of steady recovery from the recession continues," said Christina Romer, chair of the White House Council of Economic Advisers, in a statement.

"Nevertheless, faster growth is needed to bring about substantial reductions in unemployment," she added. "Much work clearly remains to be done before the U.S. economy is fully recovered."

Most troubling to economists - particularly in the months ahead - was a slowdown in consumer spending, which accounts for 70% of economic activity.

Nigel Gault, chief U.S. economist at IHS Global Insight, said the subdued consumer spending, pressured by high unemployment and debt as well as a lack of income and credit access, could lead to slower growth - or even another downturn.

"People are continuing to cut back, and that could mean that third-quarter growth will be the worst since the end of the recession," Gault said. "The slowing growth path leaves the possibility of a double-dip recession on the table."

The report showed consumer spending rose at a modest 1.6% rate last quarter. That compares to a 1.9% rise during the first quarter, revised down from a previously reported 3%.

A surge in imports also weighed on domestic growth, the government said. Imports spiked 28.8% during the second quarter, up from an 11.2% hike in the previous quarter.

But that increase was mostly due to 17% jump in business investments, as business increased spending by 22% on software and equipment, which Gault said are primarily produced outside of the United States.

"Businesses reduced spending very sharply last year during the recession by cutting costs and employees," Gault said. "The pullback helped them prop up profits. Companies are sitting on huge piles of cash, which they’re now putting to work."

While they’re willing to refresh their technology equipment, Gault said businesses are still cautious when it comes to hiring, and that will continue to strain the economy.

He added that the quarter’s significant increases in housing and government spending were driven by temporary factors and will likely reverse into declines in the current quarter.

The report showed that residential investment climbed 28% during the second quarter, as Americans rushed to buy homes ahead of the expiration of the homebuyer tax credit.

And government spending rose 9.2% during the quarter, up from 1.8% in the first quarter. Gault attributed that growth to spending related to the decennial census.

Recession deeper than previously thought

Revisions to annual GDP rates also released Friday indicated that the economic downturn was worse than the government previously estimated, and the recovery was more slack.

Between the fourth quarter of 2007, when the recession officially began, and the second quarter of 2009, when many economists say it ended, GDP dropped by 4.1%, marking the deepest recession since 1947. The government’s prior estimate for the overall decline during the period was 3.7%.

"It now appears that the financial crisis may have affected production substantially more quickly than was previously reported or realized at the time," Romer said.

The most significant factor in the downward revisions was muted consumer spending, but the data also showed that the consumer savings rate is higher than expected.

Annual growth rates for 2007, 2008 and 2009 were all revised lower.

In 2007, the government said the economy grew at a rate of 1.9%, down from the 2.1% it reported earlier. In 2008, economic activity was flat instead of ticking up 0.4%. And in 2009, the economy shrank at a rate of 2.6%, weaker than the 2.4% rate previously estimated.

"While the recession was somewhat deeper than originally thought, the recovery was also much more tepid that previously thought and is slowing rather than accelerating," said Martin Regalia, chief economist for the U.S. Chamber of Commerce, which has been critical of Obama administration business policies.

Are you a state or city worker that has been furloughed over the past year? Is this causing you financial hardship? If so, send an email to realstories@cnnmoney.com and you could be profiled in an upcoming piece at CNNMoney.com. For the CNNMoney.com Comment Policy, click here.  

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The Food and Drug Administration is looking into reports of at least 775 serious side effects from drugs recalled by McNeil, a division of Johnson & Johnson, according to a source close to a Congressional investigation.

Included in the reports were 30 deaths, nearly all of which were found to not be tied to McNeil’s recall of Tylenol, Motrin and Benadryl drugs from Jan. 1, 2008 through April 30, 2010, according to another source close to the investigation.

The FDA is also investigating reports of several hundred serious side effects — or "adverse events" — and seven deaths since May 1, when McNeil recalled 50 children’s versions of these non-prescription medicines because of serious quality and safety concerns.

The FDA’s investigation into the recalls is ongoing and the agency would not comment on the matter.

Adverse event reports are consumer complaints of a serious side effect associated with the use of a medical product, according to the FDA. Adverse events could include death, hospitalization, disability and other health complications.

The House Committee on Oversight and Government Reform has scheduled a hearing on May 27 to examine the recall.

Following the most recent recall, Johnson & Johnson (JNJ, Fortune 500) has suspended production at McNeil’s facility in Fort Washington, Penn., that manufactured the children’s drugs.

McNeil’s latest recall is its fourth in the past seven months:

• In November 2009, five lots of Tylenol Arthritis Pain 100 count with the EZ-open cap were recalled for unusual odor leading to nausea, stomach pain, vomiting and diarrhea.
• In December, the recall was expanded to include all product lots of Tylenol Arthritis Pain caplet 100 count bottles with the red EZ-open cap.
• In January 2010, the recall was widened to an undisclosed number of Tylenol, Motrin and other over-the-counter drugs after complaints of consumers feeling sick from an odor.

McNeil has maintained that its recall of the children’s drugs was not "undertaken on the basis of adverse medical events" but as a precautionary measure.

"We track all adverse events and thoroughly investigate all serious adverse cases that are reported and, in turn, report these to the FDA, whether or not the event may be caused by our products," McNeil said in a statement Tuesday.

The FDA, which earlier this month issued a scathing 17-page inspection report listing 20 violations at the Fort Washington plant, also maintains that the recalled drugs pose a "remote" potential for serious health problems.

The House panel invited Johnson & Johnson Chief Executive William Weldon to testify but he declined to be present due to health reasons. The Committee said Colleen Goggins, worldwide chairman of Johnson & Johnson’s consumer group will testify at the hearings.

The FDA said Dr. Joshua Sharfstein, principal deputy Commissioner, Deborah Autor, Director of the office of compliance and Michael Chappell, acting commissioner for regulatory affairs, will testify on behalf of the agency. 

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The number of first-time filers for unemployment insurance fell last week for a fourth straight week, according to a weekly government report released Thursday.

There were 444,000 initial jobless claims filed in the week ended May 8, down 4,000 from an downwardly revised 448,000 the previous week, according to the Labor Department’s weekly report. The number of claims is the lowest since the 442,000 reported in the week ended March 27.

The number of claims was slightly higher than expected. Economists surveyed by Briefing.com had expected new claims to fall to 440,000.

The downward trend in initial claims continues to show general improvement in the economy, and is consistent with monthly reports that show employers are starting to add jobs, said Michael Hanson, senior economist with Bank of America Merrill Lynch.

The government’s latest monthly jobs report, released Friday, showed employers added 290,000 jobs in April, the best gain in four years.

The four-week moving average for weekly initial claims was 450,500, down 9,000 from the previous week. The Labor Department tracks the four-week moving average of the weekly figures, to smooth out the volatility of the measure.

Initial claims have been stuck in the mid- to upper 400,000s since November, but seem to be hitting some resistance once they drop around 450,000.

While the recent decline in the four-week average is encouraging, economists are really looking for the number to get below 400,000 to spur sustainable job growth, said Tim Quinlan, an economist with Wells Fargo Securities.

Quinlan said he expects to see gradual improvement in payrolls through the course of the year, but no dramatic increases in job growth until initial claims fall below 400,000.

Also showing some resistance, instead of a consistent trend, are continuing claims, the number tracking people who file for unemployment benefits for two weeks or more. The government said 4,627,000 people filed continuing claims in the week ended May 1, the most recent data available. That was up 12,000 from the preceding week, but overall is still much improved over the 6,389,000 continuing claims reported in the comparable week last year.

"If you just got laid off and trying to find a job, it’s still a really difficult environment, and the climb in continuing claims tells us it’s taking people a while to land their feet in a job," Quinlan said.

Standard unemployment benefits usually last 26 weeks. The continuing claims number does not include those who have moved into state or federal extensions, or people whose benefits have expired.  

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