WASHINGTON (Reuters) – U.S. wholesale inventories fell more than initially estimated in September to post their biggest decline in nearly two years, suggesting inventory investment could continue to weigh on economic growth.
The Commerce Department said on Friday wholesale inventories fell 0.4% in September, instead of the previously reported 0.3% decline, after having risen 0.1% in August. Inventories were up 4.8% on a year-on-year basis in September.
The decline in September was the largest since October 2017.
The component of wholesale inventories that goes into the calculation of gross domestic product fell 0.3% in September.
The pace of inventory accumulation has been slowing after stocks increased strongly from the third quarter of 2018 through the first quarter of this year. The inventory overhang has led businesses to place fewer orders at factories, contributing to a downturn in the manufacturing sector, which also has been hurt by uncertainty over the ongoing U.S-China trade negotiations.
But inventories shaved economic growth only slightly in the third quarter, when the economy grew 1.9%, after chopping 0.91 percentage point from growth in the second quarter, when GDP increased by 2.0%.
In September, wholesale auto inventories fell 1.2% after declining 0.3% in the prior month. There were also declines in furniture, metals, hardware and nondurable goods.
Stocks of lumber, professional equipment and machinery posted increases.
Sales at wholesalers were unchanged in September after falling 0.1% in August. Motor vehicle sales slumped 3.1% in September after edging up 0.1% in the previous month.
At September’s sales pace it would take wholesalers 1.36 months to clear shelves, unchanged from August.
Reporting by Andrea Ricci and Melissa Bland