U.S. Business Inventories Increase 0.4% in August as Sales Climb 1.1%

U.S. business inventories rose 0.4% in August, while sales climbed 1.1%, showing that companies added to stockpiles but still moved goods fast enough to push the inventory-to-sales ratio lower.

The combined value of manufacturers’ and trade inventories reached $2.8188 trillion at the end of August, while distributive trade sales and manufacturers’ shipments totaled $2.1235 trillion. The inventory-to-sales ratio fell to 1.33 from 1.34 in July and from 1.40 in August 2025, indicating that sales growth continued to outpace inventory accumulation.

Sales outpaced stockbuilding in August

The August report extended a pattern that had already emerged in July, though at a more moderate pace on the inventory side. Total business inventories increased by $11.7 billion from the revised July level of $2.8071 trillion, while total sales rose by about $22.4 billion from a revised $2.1011 trillion. Both measures are seasonally and trading-day adjusted, but they are not adjusted for price changes, so the figures capture dollar values rather than a pure volume measure.

That distinction matters because a change in the reported value of inventories can reflect price shifts as well as a change in the amount of goods on hand. Even so, the inventory-to-sales ratio helps readers judge whether businesses are piling up unwanted stock or keeping goods relatively lean compared with demand. August’s drop to 1.33 suggests that, at the aggregate level, inventories did not build faster than goods were being sold and shipped.

Year-over-year comparisons point in the same direction. Inventories were 4.6% higher than in August 2025, but sales were up 10.2%. That larger annual rise in sales helps explain why the ratio has moved down over the past year even though the absolute dollar value of inventories kept growing. For businesses, the ratio can be a rough signal of how comfortably they are matching supply with demand. A lower reading is not automatically better in every circumstance, but a falling ratio often implies that sales are staying ahead of stockbuilding.

Retail and wholesale businesses led the latest gains

Sector details in the Census Bureau’s August manufacturing and trade inventories and sales release show that the broad August sales gain came mainly from retailers and merchant wholesalers, while manufacturers were essentially flat.

Retail sales rose 1.3% from July to $647.4 billion, and merchant wholesale sales climbed 1.8% to $817.5 billion. Manufacturers’ shipments were nearly unchanged at $658.6 billion. In other words, the overall 1.1% increase in total sales did not depend on a broad-based jump across every major category. Instead, retail and wholesale activity did most of the work, while the manufacturing side held steady after a 0.8% increase in July.

Inventories also rose across the three main sectors, but not by enough to offset the faster sales gains. Manufacturers’ inventories increased 0.5% to $972.4 billion. Merchant wholesalers’ inventories also rose 0.5%, to $964.2 billion. Retailers’ inventories were up 0.2%, reaching $882.2 billion. That mix suggests businesses were still replenishing stock, but not at a pace that overwhelmed demand in August.

The sector-level inventory-to-sales ratios show how those trends played out. Manufacturers’ ratio edged up to 1.48 from 1.47 in July, though it remained well below 1.56 a year earlier. Retailers’ ratio fell to 1.36 from 1.38, and merchant wholesalers’ ratio slipped to 1.18 from 1.19. Compared with August 2025, the wholesale ratio was down sharply from 1.28, while the retail ratio was slightly below the year-earlier 1.37 reading. Those moves indicate that wholesale and retail businesses in particular were able to turn their inventories over more quickly in August than they did a year ago.

Because wholesale and retail categories tend to respond quickly to changes in orders and consumer demand, economists and investors often watch these ratios for clues about the near-term goods cycle. August’s data do not establish a sweeping trend by themselves, but they do show that businesses were able to grow sales faster than inventories even as stock levels continued to rise in dollar terms.

Revisions and data caveats will shape the next read

The August release also carried several technical notes that matter for interpretation. The Census Bureau said the report reflects retail revisions released on Sept. 28, while revisions to wholesale estimates are scheduled for Oct. 26 and will be incorporated into the September 2026 MTIS report. That means some of the current wholesale picture could still shift when the next month’s data are published.

The report said July inventories were revised to show a 0.9% monthly gain, and July sales were revised to show a 0.5% increase. August therefore did not reverse the prior month’s direction. Instead, it extended the pattern of rising sales and rising inventories, with sales again increasing faster than stocks. On a two-month view, that leaves businesses entering late summer with leaner inventory positioning relative to sales than they had a year earlier.

The Census Bureau also notes that the front-page retail and wholesale percentage changes are accompanied by 90% confidence intervals. If an interval includes zero, the agency says there is insufficient evidence to conclude that the actual change differs from zero. Manufacturers do not contribute to those sampling-variability estimates because the manufacturers’ survey is not based on a probability sample from a known frame in the same way. In addition to sampling variability, Census says the data can also be affected by nonsampling issues such as coverage, response and coding errors.

The monthly report combines data from the Monthly Retail Trade Survey, the Monthly Wholesale Trade Survey and the Manufacturers’ Shipments, Inventories, and Orders Survey. That combined structure makes it one of the clearest single snapshots of how goods are moving through the U.S. economy, from factory shipments to wholesaler shelves to retail stockrooms. The next report, covering September 2026, is scheduled for release on Nov. 17. It will show whether the lower August inventory-to-sales ratio was the start of a more durable shift or just a month in which demand outran stockbuilding.