Business Inventories Rose 0.7% in September

The inventories for U.S. businesses rose 0.7% in September, to a seasonally adjusted $1.61 trillion, up from the previous month's $1.6 trillion. The improvement comes on the heels of a 0.6% rise in August, and is 6.2% higher than September 2011 inventory levels.

Much of September's inventory gain is the result of another strong month for automakers. Inventories for the U.S. auto industry jumped 0.9% in September, following a 1.2% increase in August. The retail trade and food and beverage industries each posted gains of 0.3%.

Furnishings, electronics and appliance inventories, along with general merchandise stores, each declined 0.4%, offsetting much of the inventory gains of automakers. Inventories of building materials and garden supplies rose a modest 0.2% in September.

Business inventories are adjusted based on variations in the reporting period, and are closely watched indicators of economic growth. A rise in inventories is widely viewed as a positive economic indicator, as U.S. companies prepare for an expected increase in future orders.

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