WASHINGTON -- The U.S. Commerce Department said Friday businesses added to inventories in September, but the pace of accumulation slackened.

The government agency said inventories rose 0.1 percent to a seasonally adjusted $1.258 trillion, after rising 0.7 percent in August.

Wall Street economists had expected business inventories to rise 0.4 percent during the month.

Commerce also said business sales rose 0.3 percent in September, after increasing 0.6 percent during the previous month.

Analysts see rising inventories as either a sign of confidence in future demand or a result of an unanticipated sales drop that has led to involuntary stockpiling. To determine which, experts look at the inventory-to-sales ratio.

The ratio has been very low all year, suggesting stocks are lean. It held steady at 1.32 in September, Commerce said.

The gauge indicates how well firms are matching supply with demand. It measures how many months are needed for a firm to sell all current inventories.

Copyright 2004 by United Press International