With retail and wholesale inventories showing notable increases, the Commerce Department released a report on Friday showing unexpected growth in U.S. business inventories in the month of September.
The report said business inventories rose by 0.3 percent in September after inching up by a revised 0.1 percent in August. Economists had expected inventories to come in unchanged compared to the flat reading originally reported for the previous month.
The unexpected increase in business inventories was partly due to the growth in retail inventories, which swelled by 0.8 percent in September after rising by 0.5 percent in August.
Wholesale inventories also climbed by 0.5 percent in September following a 0.3 percent increase in August.
On the other hand, the report said manufacturing inventories fell by 0.4 percent in September, matching the drop seen in the previous month.
The Commerce Department also said business sales came in unchanged in September after sliding by 0.6 percent in August.
Retail sales were unchanged for the month, while a 0.5 percent increase in wholesale sales offset a 0.4 percent drop in manufacturing sales.
With inventories rising and sales unchanged, the total business inventories/sales ratio crept up to 1.38 in September from 1.37 in August. The ratio came in at 1.31 a year ago.
The Commerce Department also said business inventories in September were up by 2.5 percent year-over-year, while business sales fell at an annual rate of 2.8 percent.
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