WASHINGTON — Business inventories grew 0.5% in September, the government said Thursday, leading some analysts to express concern the buildup could lead to further production cuts and loss of jobs.
Economist Evelina Tainer of the First National Bank of Chicago noted that industrial production in October already dropped 0.8%, its sharpest cutback in nine months.
"It's consistent with the idea that the economy is sliding into a recession and growth will be negative in the fourth quarter," she said.
Analysts said the inventory level itself had not reached a dangerous level although continued vigilance was needed to prevent an even deeper reduction in output.
The Commerce Department said inventories held on shelves and back lots in September totaled a seasonally adjusted $811.5 billion, up from $807.5 billion the previous month.
But the accumulation slowed from a 0.7% gain in both July and August, the largest increases since an 0.8% advance in July, 1989.
Business sales dipped 0.5% to a seasonally adjusted $548.7 billion, down from $551.5 billion a month earlier.
It was the first decline in sales since a 0.4% drop in July and the largest since a 1.0% decrease last April. August sales had jumped 2.1%.