U.S. Business Inventories in September

WASHINGTON (Reuters) – U.S. business inventories increased less than expected in September, with a rise in retail stocks partially offset by declines at manufacturers and wholesalers.

Inventories edged up 0.1% after advancing 0.3% in September, according to the Commerce Department's Census Bureau. Economists polled by Reuters had forecast inventories, a key component of gross domestic product (GDP), would gain 0.2%.

On a year-on-year basis, inventories rose 2.2% in September. Inventories and trade are the most volatile components of GDP, with private inventory investment acting as a small drag on GDP in Q3. The economy grew at a 2.8% annualized rate in the July-September quarter.

Retail inventories increased 0.9% in September, a slight revision from the 0.8% estimated in an advance report published last month, and gained 0.8% in August.

Motor vehicle inventories accelerated 2.1% as previously reported, following a 1.2% rise in August. Retail inventories excluding autos, which factor into the GDP calculation, gained 0.2% instead of 0.1% as reported last month, having increased 0.6% in August.

Wholesale inventories fell 0.2% in September, along with stocks at manufacturers.

Business sales increased 0.3% in September after slipping 0.2% in August. At September's sales pace, it would take 1.38 months for businesses to clear shelves, unchanged from August.