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 reported Wednesday that inventories increased 0.6 percent after advancing 0.4 percent in August. The September gain was the largest in eight months.
Business sales rose 0.2 percent after increasing 0.3 percent in August. At September's sales pace, it would take 1.29 months for businesses to exhaust inventories, unchanged from the previous month.
Inventories are a key component of changes to gross domestic product (GDP). Retail inventories excluding autos - which are part of the calculation of GDP - rose 0.4 percent in September after a 0.3 percent gain the previous month.
The increase in inventories excluding autos implies the government will raise its 2.8 percent GDP growth estimate for the third quarter when it publishes revisions.