WASHINGTON (Reuters) - U.S. business inventories rose more than expected in September as sales advanced modestly, suggesting the government’s third-quarter growth estimate could be revised higher.
The Commerce Department said on Wednesday inventories increased 0.6 percent after advancing 0.4 percent in August. That was the largest increase since January.
Economists polled by Reuters had forecast inventories rising 0.3 percent in September.
Inventories are a key component of gross domestic product changes. Retail inventories, excluding autos - which go into the calculation of GDP - rose 0.4 percent after increasing 0.3 percent in August.
The increase in inventories ex-autos implies the government will raise its 2.8 percent growth estimate for the third quarter when it publishes gross domestic product revisions.
The rate of inventory accumulation in the face of tepid consumer spending suggests businesses will have little appetite to maintain the brisk pace in the fourth quarter, which economists expect to weigh on GDP growth.
Business sales rose 0.2 percent in September after gaining 0.3 percent the prior month. At September’s sales pace, it would take 1.29 months for businesses to clear shelves, matching the prior month.
Reporting by Lucia Mutikani; Editing by Andrea Ricci