News Column

U.S. Business Inventories Jumped in September

November 20, 2013

Martin Crutsinger, AP Economics Writer

ap inventories
U.S. businesses upped their inventories in September despite modest sales gains (AP)

WASHINGTON (AP) U.S. businesses increased their stockpiles in September by the largest amount in eight months while sales posted a modest gain.

Business inventories rose 0.6 percent in September compared with August, the Commerce Department reported Wednesday. Sales rose 0.2 percent.

A big jump in restocking helped drive faster economic growth from July through September. But there is concern that a pullback in inventory rebuilding will dampen growth in the current quarter. Rising stockpiles boost growth because they mean more factory production.

The September rise in inventories was the largest since a 1 percent increase in January. It pushed total inventories to $1.68 trillion, up 3.1 percent from a year ago.

Inventories had increased 0.4 percent in August, while sales were up 0.3 percent that month.

The rise in September inventories was led by a 0.9 percent increase in stockpiles held by retailers. Inventories held by manufacturers and wholesalers both increased 0.4 percent.

The strength in sales in September came from a 0.6 percent rise in sales at the wholesale level.

The overall economy grew at a 2.8 percent annual rate in the July-September quarter, faster than a 2.5 percent growth rate in the April-June period. And 0.8 percentage point of that gain came from growth in stockpiles.

But the gains may not last. Consumers and businesses have been spending at a cautious pace. If that continues, companies will not need to keep building stockpiles at the same rapid pace as they did in the third quarter.

That prospect of a slowdown in stockpiling is a key reason many of them have said they expect the economy to slow to an annual growth rate below 2 percent in the final three months of the year.

But in an encouraging sign for demand, the government reported Wednesday that retail sales rose 0.4 percent in October after sales had been flat in September. Because of that strength, some economists said they may boost their forecast for growth in the fourth quarter.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Original headline: US business stockpiles up 0.6 percent in September

Original headline: US business stockpiles up 0.6 percent in September


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Source: Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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