Inventories on Track to Boost Q3 GDP
|Business inventories rose 0.7 percent in August, with gains across major industry groups. A similarly sized pickup in sales kept the inventory-to-sales ratio steady, but the auto sector remains an area of concern.
Inventories Are Up, But So Are Sales
- The pace of inventory building picked up in August with manufacturers, wholesalers and retailers making the biggestadditions to stockpiles since last November. Business inventories rose 0.7 percent, matching the gain in sales. That kept the inventory-to-sales ratio steady at 1.38.
- The gain follows a 0.3 percent increase in July and points to inventories providing a sizeable boost to headline GDP in Q3.
Are Auto Inventories on a Collision Course?
- Retail inventories rose 0.7 percent last month. The increase waslargely driven by a 1.3 percent rise at autos and parts dealers.
- Separately reported data show auto sales surged to a 12-yearhigh in September, so inventories have likely come down morerecently. However, inventories have been running ahead of sales for the past year and a half and suggest auto production may stillneed to be pared back to right-size inventories with sales.
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