WasHINGTON Stockpiles of goods at U.S. businesses rose more than expected in August, as new cars and trucks arrived on dealer lots and stores prepared for the Christmas shopping season, government figures showed today.
Inventories at manufacturers, wholesalers and retailers rose 0.7% for the month after a gain of 0.4% in July that was larger than previously estimated, the Commerce Department said. Analysts had expected an inventory gain of 0.4% for August after a previously reported rise of 0.2% in July.
Augusts increase was paced by a 1.4% jump in retailer stockpiles after a 0.1% decline in July. Overall business sales rose 0.5% after falling 0.6%.
Merchants have made their bets on a strong Christmas, said Christopher Low, chief economist at First Tennessee Capital Markets in New York. With unemployment at a 30-year low of 3.9%, shoppers will have money to spend. Still, higher oil prices and an erratic stock market add risk to the gamble. Retailers have a right to be nervous, Mr. Low said.
The rise in inventories suggests the economy grew faster than analysts had been predicting in the third quarter, which ended Sept. 30. Economic output may have expanded as fast as a 4% annual rate, compared with previous estimates of 2.8% to 3.4%, analysts said. The economy grew at a 5.6% pace in the second quarter.
For August, the inventory-to-sales ratio, which measures the time goods sit at businesses, rose to 1.34 months from 1.33 months in July. The ratio had fallen to a record low of 1.31 months in March.
The gain in retail inventories was the largest since they rose 1.5% in May. It was paced by a 2.8% increase at auto dealers. The auto buildup, as year 2001 models arrived on lots, preceded a September in which cars and light trucks sold at an annual rate of 17.9 million vehicles. That was the strongest sales month since April, when new cars and trucks sold at an 18 million pace. And it kept annual sales on track to beat the 1999 record of almost 17 million.
In other categories, wholesale inventories, which make up about one fourth of the combined inventories report, rose 0.6% in August after gaining 0.3% in July. Wholesale sales rose 0.3% in August after falling 0.3% in July.
Stockpiles at manufacturers, which account for almost half the business inventories report, rose 0.3% in August after increasing 0.9% in July. Factory shipments rose 1% in August after falling 1.7% in July.