Business Inventories Up 0.3 Percent In June

From MSNMoney.com:

Inventories held by businesses rose for a sixth straight month in June but sales declined for a second month in a row.

Inventories increased 0.3 percent in June, the Commerce Department reported Friday. But sales fell 0.6 percent following an even larger 1.2 percent sales decline in May.

The weakness in sales raises concerns about whether companies will continue boosting inventories. Inventory rebuilding had been an important source of strength driving the economic rebound.

Businesses had been rebuilding their inventories in recent months after slashing them aggressively during the recession. But if consumer demand weakens further, businesses could start cutting back. That would mean fewer orders to U.S. factories and weaker output for manufacturers.

The consecutive declines in sales in May and June followed 13 straight increases in total business sales. The June decrease reflected less demand for manufacturers, wholesalers and retailers. A separate report Friday showed that sales at the retail level rebounded in July but the strength was concentrated in higher demand for autos and gasoline.

Why a $14/hour Employee Costs $20

Although we all hear about how expensive it is to be a business owner, most people rarely consider how costly it can be to hire new employees. CNN Money posted a very interesting article on why an employee making $14 per hour can really cost their employer as much as $20 an hour.

You probably cost your boss a lot more than you think you do.

For Jim Garland, who owns a corporate aircraft cleaning and support services company, a $14 per hour worker has a true cost of $19.63 per hour, or about 40% more than base pay. This so-called "loaded rate" includes fixed expenses -- federal and state taxes, health insurance, workman's compensation, uniforms, and paid time off -- along with soft costs like the time spent training a new hire.

Washington's lawmakers are throwing a lot of ammo at reducing the jobless rate, including a new tax break for hiring the unemployed. But no matter what incentives the government offers, it's hard to convince business owners to hire until they're absolutely certain they need to. Employees are often the most expensive investment a business makes.

"Our entire existence revolves around two numbers: revenue and payroll," Garland said of Sharp Details, in Dulles, Va., which he launched out of his car trunk in 1991. Payroll for 60 workers accounts for around 70% of his firm's operating costs.

Garland outsources his entire human resource department. Joe Sherrier, director of human resources for Employment Enterprises -- the company that manages Garland's HR -- said that as a general rule, business owners should to expect an employee to cost an additional 25% to 30% on top of base salary each year.

Continue reading at CNN Money.com…