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US wholesale stockpiles grew 1.1 pct. in September

Associated Press Modified: November 9, 2012 at 11:45 am •  Published: November 9, 2012

Some analysts said the strong rise in sales in September should encourage more restocking in coming months which would give a further boost to factory production. But Steven Wood, chief economist at Insight Economics, cautioned that while the sales gain in September was the best in 18 months, the trend in sales growth has been slowing.

Stockpiles climbed to a seasonally adjusted $494.2 billion in September, 28.4 percent above a September 2009 post-recession low. Companies typically boost stockpiles when they are optimistic sales will rise.

Economic growth slowed in the spring, in part because high unemployment and low pay increases kept U.S. consumers from spending more freely. Consumer confidence has increased sharply since then and that has translated into a rise in consumer spending, which accounts for nearly 70 percent of economic activity.

A stronger job market could also help boost growth in the final three months of the year. When more people find jobs, consumer spending typically increases.

The government reported last week that employers added 171,000 jobs in October and hiring was stronger in August and September than first thought. Job growth at that pace was an indication that the economy is strengthening but at a slow pace.