When inventory accumulation does occur, the starting point is usually the retail sector.

He said inventory accumulation was stronger than expected, indicating businesses would not add to stocks.

Apart from consumer spending, noticeable contributions came from business investment and inventory accumulation.

They said a slowdown in the pace of inventory accumulation in the second quarter also helped.

Business sales far outpaced inventory accumulation in August, the Government said in a report.

This inventory accumulation accounted for a big chunk of the strong economic growth in the first quarter.

Much of last winter's big pileup, when inventory accumulation hit a record $91 billion, has already been whittled away.

"Now, short-term real rates of interest are high enough to prevent speculative inventory accumulation," he added.

"But the unwinding of this inventory accumulation in the first quarter" will mean production cut backs and slower economic growth, he said.

That is not quite as true at factories, where inventory accumulation jumped to a pace of nearly $30 billion, compared with $22 billion last fall.