Wholesale Inventories Fall, Sales Grow In Sept.

MARTIN CRUTSINGER

WASHINGTON (AP) — Businesses cut inventories at the wholesale level for a record 13th consecutive month in September, but sales rose for a sixth straight time.

The hope is steadily rising sales will encourage businesses to begin restocking shelves, a move that would boost production and bolster an economic recovery. But worries persist that consumer spending, which accounts for 70 percent of economic activity, could falter as various government stimulus programs begin to wane and unemployment keeps surging.

The Commerce Department said Friday that businesses reduced inventories at the wholesale level 0.9 percent in September, slightly less than expected. Sales by wholesalers rose 0.7 percent, slightly better than the 0.6 percent gain economists expected.

Steady gains in sales should help convince businesses to stop slashing inventories, which has been a severe drag on growth, economists say. A switch to rebuilding stockpiles would trigger higher factory production and economic growth.

However, consumers face rising unemployment and other headwinds as the economy struggles to emerge from the worst recession since the 1930s. The Labor Department said Friday in a separate report that unemployment surpassed 10 percent for the first time since 1983, jumping to 10.2 percent in October. Economists expect it will go even higher in coming months.