Highlights
Restocking at auto dealers, in yet another cash-for-clunkers effect, held back the rate of inventory draw during September. Business inventories fell 0.4 percent in the month vs. a long run of much more severe draws. The decline in inventories was in proportion to the decline in sales, which fell 0.3 percent. The stock-to-sales ratio is unchanged at 1.32.

Dealers and auto parts stores added more than $4 billion to their inventories in September for a 3.8 percent surge and biggest since 1992. This swing rounds out the enormous month-to-month effects from the cash-for-clunkers program. Ex-auto, retail inventories show a 0.6 percent decline with decreases across most components.

Excluding autos, business inventories fall a more noticeable 0.8 percent, still on the better side of trend but not one confirming a shift is underway in the inventory cycle. Today's retail sales report for October was mostly strong, especially for motor vehicles in what is justification for the September rise in auto inventories. Next indication on U.S. inventories will be posted with Thursday's Philadelphia Fed manufacturing report followed by next week's durable goods orders which will offer national data for October.

Market Consensus Before Announcement
Business inventories in August fell 1.5 percent, following a 1.1 percent decline in July. For the latest month, retailer inventories dropped a clunker-skewed 2.3 percent but excluding autos slipped only 0.3 percent. Manufacturers’ inventories declined 1.0 percent in August while wholesalers fell 0.9 percent. More recently, manufacturers’ inventories dropped 1.0 percent again in September and wholesale inventories declined 0.9 percent, indicating a likely decrease in overall business inventories, pending retail inventories.

2009 Release Schedule

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