US business inventories grew moderately in August as sales and restocking both strengthened.
US business inventories increased moderately in August amid strong sales growth, according to government data released on Thursday. Inventories rose 0.4% after surging 0.9% in July, the Commerce Department’s Census Bureau said, in line with economists’ expectations. Inventories were up 4.6% year-on-year, as businesses continue rebuilding stock levels that had been drawn down for five straight quarters amid robust consumer spending and investment in artificial intelligence.
The restocking effort remains heavily reliant on imports, which are weighing on GDP growth. Economists estimate trade could subtract as much as 2.5 percentage points from third-quarter GDP, though they expect restocking to offset much of that drag. Growth estimates for the third quarter are mostly around a 3.0% annualised rate, following 2.2% growth in the second quarter, when inventories subtracted 0.53 percentage points from GDP.
Retail inventories rose 0.2% in August, revised down from an earlier estimate of 0.3%, after a 0.9% July increase. Motor vehicle inventories climbed 0.8%, matching prior estimates. Retail inventories excluding autos were unchanged, down from an initial 0.1% estimate. Wholesale and manufacturer inventories each rose 0.5%. Business sales jumped 1.1% in August after a 0.5% rise in July, leaving the inventory-to-sales ratio at 1.33 months, down from 1.34 in July and 1.40 a year earlier.
Source: Reuters
