MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON (AP) — U.S businesses left their stockpiles unchanged in October, while total business sales fell for the second month out of the past three. The results could raise concerns about economic growth this quarter.
October business inventories were flat following a tiny 0.1 percent rise in September, the Commerce Department reported Friday. It was the weakest showing since July. Sales fell 0.2 percent in October after being flat in September.
Overall economic activity was muted this summer partly because businesses trimmed stockpiles to align with weaker sales. Economic growth slowed to an annual rate of 2.1 percent in the third quarter.
For the July-September period, the inventory slowdown trimmed overall growth by 0.6 percentage point. That was a key reason gross domestic product decelerated from a growth rate of 3.9 percent in the April-June quarter.
Economists at JPMorgan Chase are forecasting that further reductions in stockpiling will sap 0.7 percentage point from growth this quarter. They are forecasting that GDP will expand by a moderate 2 percent.
For October, the first month in the fourth quarter, the flat reading for total inventories reflected a 0.1 percent drop in stockpiles held by manufacturers and a 0.1 percent decline in stockpiles held by wholesale businesses. These declines were offset by a 0.1 percent rise in inventories held by retailers.
A separate report Friday showed that retail sales rose a modest 0.2 percent in November, marking a slight improvement after months of lackluster spending.
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