U.S. business inventories fell at a record pace in October, driven by plunging stocks at retailers and auto dealers, the government said on Friday. 

Inventories at U.S. businesses fell 1.4 percent, the biggest plunge since the Commerce Department began keeping records in their current form in 1992, following a downwardly revised 0.6 percent decline in September. Analysts were expecting inventories to drop just 0.6 percent in October. 

Business sales also broke a record in October, rising by 2.7 percent after a drop of 2.9 percent the previous month. Inventories at retailers fell 2.8 percent, the largest since records have been in their current form, after a 0.3 percent drop in September. Sales at retailers jumped 7.0 percent, setting another record. 

Meanwhile, inventories at motor vehicle and parts dealers dropped a record 8.9 percent as consumers rushed to take advantage of zero-interest financing deals. In September, auto inventories posted a drop of just 0.5 percent. 

``The drop in business inventories was good news for the economy. We're getting closer to the point where manufacturers might not want to cut production a lot further,'' said Gary Thayer, chief economist at A.G. Edwards and Sons in St. Louis. 

The stock-to-sales ratio fell to 1.39 months' worth from 1.45 months in September, the lowest since the reaching the same level in June 2000. 

Manufacturing inventories were down 0.4 percent following a decline of 0.9 percent in September. Inventories at wholesalers fell 1.0 percent in October after a drop of 0.4 percent the previous month.