U.S. business inventories increased more than expected in July as retailers and wholesalers restocked to meet robust demand, suggesting that inventories could add to economic growth in the third quarter.
Inventories jumped 0.8% after edging up 0.1% in June, the Commerce Department's Census Bureau said on Wednesday. Economists polled by Reuters had forecast inventories, a key component of gross domestic product and one of the most volatile, gaining 0.3%.
Inventories subtracted 0.72 percentage point from gross domestic product growth in the second quarter. The economy grew at a 1.5% annualized rate last quarter. Growth estimates for the July-September quarter currently exceed a 2% pace.
Retail inventories rebounded 0.8% in July, instead of 0.7% as estimated in an advance report last month. They fell 0.2% in June. Motor vehicle inventories advanced 0.8%, rather than 0.7% as previously reported. They increased 0.5% in June.
Retail inventories excluding autos, which go into the calculation of GDP, rose 0.8% instead of 0.7% as estimated last month. They fell 0.5% in June. Wholesale inventories increased 1.3% in July while stocks at manufacturers rose 0.4%.
Business sales climbed 0.3% in July after decreasing 1.0% in the prior month. At July's sales pace, it would take 1.30 months for businesses to clear shelves, unchanged from June. The inventories/sales ratio was at 1.37 months in June 2025.
