WASHINGTON – U.S. wholesalers boosted their stockpiles in September by the largest amount in three months, responding to a robust rebound in sales.
Stockpiles at the wholesale level increased 0.5 per cent, the biggest increase since a 0.7 per cent rise in June, the Commerce Department reported Tuesday. Inventories had risen 0.3 per cent in August.
Sales advanced 0.5 per cent in September, recovering from a 0.9 per cent fall in August. It was the biggest gain in five months.
Economists are forecasting further sales gains in the months ahead. Rising demand is expected to boost confidence among businesses and prompt them to expand stockpiles.
A major effort to work down an overhang of unsold inventories was a big drag on economic growth in the summer.
The cutback in inventory restocking reduced economic growth by 1.4 percentage points in the third quarter.
This was the primary reason that the overall economy, as measured by the gross domestic product, slowed to a gain of just 1.5 per cent in the July-September period. That was down from GDP growth at a 3.9 per cent rate in the second quarter.
Economists believe the economy will rebound in the fourth quarter to growth of around 2.5 per cent.
Analysts are counting on strong employment gains to boost consumer spending during the all-important holiday shopping season.
The government reported last week that that businesses created 271,000 jobs in October, the largest amount all year, pushing the unemployment rate down to 5 per cent, the lowest point in seven years.