Wholesale companies reduced their stockpiles in September for the first time in nearly two years as distributors tried to keep pace with sales that rose more than forecast.
The Commerce Department says wholesale inventories decreased 0.1 percent, compared with a 0.5 percent gain estimated by analysts. August reading was also revised down to a 0.1 percent gain from a 0.4 percent rise.
The decline in inventories occurred largely because businesses cut their stockpiles of nondurable goods by 0.9 percent, most of which came from agricultural products, petroleum and clothing.
Inventories of durable goods, such as machinery, automotive and furniture, increased 0.4 percent in September, today's report showed.
Sales climbed 0.5 percent in September, following a 1.0 percent rise in August. The value of unsold nondurable goods purchases climbed 1.2 percent. September registered the first gain in sales of nondurable goods since April. Sales of chemicals and allied products were up 7.8 percent from last month and sales of petoleum and petroleum products were up 3.9 percent.
Americans borrowed more in September to purchase cars and cover college expenses, but their usage of credit cards dipped, a report released by the Federal Reserved showed Monday. However, the drop in inventories may indicate that wholesalers were worried in September that future sales could slow.
Enough goods were kept on hand by the wholesalers to last 1.15 months at the current sales pace in September, close to a record low reached in March this year. Wholesale inventories, which include imported merchandise, may contribute less to growth compared with earlier in the recovery.
Wholesalers make up about 30 percent of all business stockpiles, the Department of Commerce says.