By Christopher S. Rugaber
and Martin Crutsinger
AP Economics Writers
WASHINGTON (AP) — U.S. wholesalers increased their stockpiles in September for the third straight month, an indication that they expect more demand from businesses and consumers.
Wholesale stockpiles rose a seasonally adjusted 0.4 percent, the Labor Department said Friday. That follows an increase of 0.8 percent in the previous month. August’s increase was the highest in seven months.
Sales at wholesale businesses rose 0.6 percent in September, up from 0.4 percent in August.
Stockpiles of computer equipment and machinery increased. Inventories of consumer items such as groceries, clothing and beer, wine and other alcoholic beverages also rose.
Strong restocking helped drive the economy’s 2.8 percent annual growth rate in the July-September quarter. Rising stockpiles contributed 0.8 percentage point to growth.
Rising stockpiles boost growth because it means factories have produced more goods. And rising sales among wholesalers shows businesses are unlikely to get caught with too many unsold goods on their shelves.
Meanwhile, U.S. factories increased production for a third straight month in October, as stronger output of primary metals and furniture offset declines in auto production.
Manufacturing output rose 0.3 percent last month, up from 0.1 percent in September, the Federal Reserve reported Friday. Factory output is the biggest component of industrial production, which also includes mining and utilities.
Overall industrial production fell 0.1 percent after a 0.7 percent September gain. The mining sector, which includes oil and gas drilling, declined 1.6 percent after six months of gains. Utility output fell 1.1 percent.
Manufacturing has been gaining strength in recent months. Output has risen in five of the past six months.