U.S. wholesale inventories rose more than expected in October, prompting some economists to raise their growth forecasts for the fourth quarter.

    The U.S. Commerce Department said Tuesday wholesale inventories increased 0.4 percent, despite an energy price-related decline in the value of petroleum stocks. September’s wholesale stocks were revised up to show a 0.4 percent gain.

    Inventories are a key component of gross domestic product changes. The component that goes into the calculation of GDP — wholesale stocks excluding autos — increased 0.6 percent.

    Barclays raised its fourth-quarter growth estimate by two-10ths of a percentage point to an annual pace of 2.5 percent. The economy grew at a 3.9 percent pace in the third quarter, with inventories acting as a mild drag.

    However, the upward revision to overall wholesale stocks in September suggested third-quarter GDP growth would be raised by at least 0.1 percentage point when the government publishes its second revision of the data later this month, economists said.

    JP Morgan cautioned that the apparent strong inventory accumulation in the third quarter posed a downside risk to GDP growth estimates in the final three months of the year. (SD-Agencies)