WASHINGTON, (Reuters) - U.S. business inventories recorded their biggest decline in nearly a year in October amid a drop in stocks at retailers, suggesting a modest contribution
to fourth-quarter economic growth from inventory investment.
The Commerce Department said on Wednesday that business inventories fell 0.2 percent after being unchanged in September.
That was the largest drop since last November.
Economists had forecast inventories, which are a key component of gross domestic product, dipping 0.1 percent in October. Retail inventories fell 0.4 percent in October as reported in an advance report published last month. They were unchanged in September.
Retail inventories excluding autos, which go into the calculation of GDP, decreased 0.2 percent in October instead of the 0.3 percent drop reported last month. That followed a 0.1 percent dip in September.
Inventory investment rebounded in the third quarter, contributing half a percentage point to the economy's 3.2 percent annualized growth rate during that quarter. Inventories had weighed on GDP growth since the second quarter of 2015.
In October, business sales increased 0.8 percent after a similar gain in September. At October's sales pace, it would take 1.37 months for businesses to clear shelves, down from 1.38 months in September.
Reporting by Lucia Mutikani; Editing by Andrea Ricci