Total business inventories rose a moderate 0.4% during September following the prior month's 0.3% gain. The three month change in inventories remained stable with the prior few months, up from earlier this year but half the growth rates seen last year. That slowing remained a function of the slower growth in sales

Retail inventories ticked up just 0.1%. Inventories of motor vehicles & parts dealers actually fell a slight 0.1% (+2.1% y/y) after the 1.5% spurt during August. Excluding autos, retail inventories rose a modest 0.2% following a little revised, negligible August decline. Furniture inventories spurted 1.3% (3.3% y/y) and the three month change rose to an excessive (9.9%, AR). At clothing & accessory stores inventories rose 0.1% and offset a 0.1% August downtick and it left the three month at a manageable 0.0%. Inventories at General merchandise stores also seemed under control. a 0.4% gain followed declines during the prior three months and three month growth was a negative 2.8%.

Wholesale inventories rose 0.8% following a very much upwardly revised 0.7% August increase. Petroleum inventories fell for third straight month (-1.3% y/y) and less petroleum, wholesale inventories rose 0.9%, up 5.4% y/y which is a y/y growth rate which has halved versus late last year. During the last ten years there has been a 59% correlation between the annual change in wholesale inventories les petroleum and the change in merchandise imports.

Factory inventories rose 0.6% (2.2% y/y) after two months of little change. Three month growth in manufacturers' inventories was 2.3% versus a 6.4% rate of growth during all of last year.

The Role of Money in Monetary Policy: Why Do the Fed and ECB See It So Differently? from the Federal Reserve Bank of Kansas City can be found here.