WASHINGTON, Dec 16 (Reuters) – U.S. business inventories increased slightly more than expected in September, suggesting inventories probably added to economic growth in the third quarter.
Inventories rose 0.2% after being unchanged in August, the Commerce Department’s Census Bureau said. Inventories are a key component of gross domestic product and one of the most volatile. Economists polled by Reuters had forecast inventories rising 0.1%. They increased 1.2% year-on-year in September.
The report was delayed by the recently ended 43-day shutdown of the government.
Retail inventories increased 0.4% in September after being unchanged in August. Motor vehicle inventories jumped 1.2% after gaining 0.1% in August. Retail inventories excluding autos, which go into the calculation of GDP, were flat for a second straight month.
Wholesale inventories rose 0.5% in September while stocks at manufacturers fell 0.1%.
Business inventories decreased at a $18.3 billion annualized rate in the second quarter, subtracting 3.44 percentage points from GDP. That was, however, more than offset by a record 4.83 percentage point contribution from a smaller trade deficit.
The Atlanta Federal Reserve is forecasting gross domestic product increased at a 3.6% annualized rate in the third quarter. The government will release its first estimate of third-quarter GDP on December 23 after it was delayed by the shutdown. The economy grew at a 3.8% pace in the April-June quarter. While the rebound in inventories likely added to GDP growth last quarter, it also reflected softening demand.
Business sales were unchanged in September for the second consecutive month. Sales at retailers ticked up 0.1%. At September’s sales pace, it would take 1.37 months for businesses to clear shelves, unchanged from August.
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)