U.S. business inventories rise; third-quarter growth likely to be raised

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revised higher later this month.

The Commerce Department said on Friday inventories increased 0.3 percent after an upwardly revised 0.1 percent gain in August. Inventories in August were previously reported to have been unchanged.

Economists polled by Reuters had forecast inventories being unchanged in September.

Inventories are a key component of gross domestic product.

Retail inventories excluding autos, which go into the calculation of GDP, increased 0.5 percent in September after a similar rise in August.

September's increase in inventories excluding autos was more than the government estimated in its advance GDP report last month. That report estimated that inventories sliced off 1.44 percentage points from GDP growth in the third quarter, leaving output expanding at a 1.5 percent annual rate.

">revised higher later this month.The Commerce Department said on Friday inventories increased 0.3 percent after an upwardly revised 0.1 percent gain in August"

Wholesale inventory data this week also suggested the drag from inventories was probably not as large as estimated in the third-quarter GDP snapshot. Following the wholesale inventory data, economists expected that third-quarter GDP could be

revised up to as high as a 1.9 percent rate later this month.

In September, business sales were unchanged after declining 0.6 percent in August.

At September's sales pace, it would take 1.38 months for businesses to clear shelves, compared to 1.37 months in August.

That was the highest ratio since May 2009, suggesting that inventory liquidation could persist through the fourth quarter and weigh on growth.

((Reporting by Lucia Mutikani; Editing by Paul Simao))