U.S. Business Inventories Rise 0.8% in July as Sales Gain 0.3%

U.S. business inventories increased 0.8% in July from the previous month to a seasonally adjusted $2.7647 trillion, while combined business sales and manufacturers’ shipments rose 0.3% to $2.1207 trillion, the U.S. Census Bureau reported Wednesday.

The July figures widened the gap between the monthly growth rates of inventories and sales, but the longer-term comparison pointed in the other direction. Inventories were 3.8% higher than in July 2025, while sales were up 8.9% over the same period. The total inventory-to-sales ratio was 1.30, unchanged from June on a rounded basis and down from 1.37 a year earlier.

The Census Bureau’s Manufacturing and Trade Inventories and Sales report combines data for manufacturers, retailers and merchant wholesalers. The figures are adjusted for seasonal and trading-day differences, and sales are also adjusted for holiday effects, but the estimates are not adjusted for price changes. That means the report measures the dollar value of inventories and sales rather than inflation-adjusted physical quantities of goods.

Wholesale inventories led the July buildup

Merchant wholesalers accounted for the largest share of July’s inventory increase. Wholesale inventories rose 1.3% to $958.9 billion from a revised $946.7 billion in June. That was an increase of about $12.2 billion, or slightly more than half of the $22.2 billion rise in total business inventories during the month.

Retail inventories increased 0.8% to $839.0 billion, adding about $6.5 billion from June. Manufacturers’ inventories rose 0.4% to $966.9 billion, an increase of roughly $3.5 billion. The three components together show that the July buildup was broad, but much of the monthly change was concentrated in the wholesale sector.

The year-over-year pattern was also strongest among wholesalers. Wholesale inventories were 5.7% above July 2025 levels, compared with gains of 3.9% for retailers and 2.0% for manufacturers. The comparison matters because the total inventory figure can move for different reasons across the supply chain, and a broad increase does not necessarily mean that factories, distributors and stores are building stock at the same pace.

Within retail, motor vehicle and parts dealers held $270.9 billion of inventories in July, up 0.8% from June. Building-materials, garden-equipment and supply stores increased inventories 0.7% to $90.8 billion, while food and beverage store inventories rose 0.4% to $65.3 billion. General merchandise inventories slipped 0.1% to $98.8 billion. Those category figures help show why the overall retail increase cannot be traced to a single type of seller.

Sales rose overall even as retail sales declined

Combined sales and manufacturers’ shipments increased by about $7.1 billion in July. Wholesale sales rose 0.8% to $801.3 billion, and manufacturers’ shipments also increased 0.8% to $658.8 billion. Retail sales, by contrast, fell 0.7% to $660.6 billion in the monthly data used for the report.

The sector differences were also visible in the inventory-to-sales ratios. The wholesale ratio edged up to 1.20 from 1.19 in June because inventories grew faster than sales. The retail ratio rose to 1.27 from 1.25 as inventories increased and sales declined. Manufacturers’ ratio remained at 1.47. Even with those monthly moves, all three ratios were below their July 2025 readings, when the ratios stood at 1.28 for wholesalers, 1.28 for retailers and 1.56 for manufacturers.

On a year-over-year basis, wholesale sales were up 13.0%, manufacturers’ shipments increased 8.3%, and retail sales rose 5.0%. The faster annual growth in sales than inventories across the combined business sector is consistent with the decline in the total inventory-to-sales ratio from a year earlier. It does not by itself establish whether firms consider their stocks too high or too low, but it shows that inventories were smaller relative to the current sales pace than they were in July 2025.

The July increase in inventories also followed a much smaller June change. Census revised June business inventories to $2.7425 trillion, up 0.1% from May. The agency marks that June monthly change as statistically uncertain because its 90% confidence interval includes zero. For July, the reported 0.8% inventory increase carried a sampling margin of plus or minus 0.1 percentage point, while the 0.3% sales increase carried a margin of plus or minus 0.2 percentage point.

The inventory-to-sales ratio remains below last year’s level

The total ratio of 1.30 means businesses held inventories equal to about 1.30 months of sales at July’s seasonally adjusted sales pace, using the Census measure. It is a broad turnover indicator rather than a direct measure of shortages, excess stock or future production. The ratio can also be affected by price changes because the underlying dollar estimates are not adjusted for inflation.

July’s 1.30 reading was the same as June after rounding, even though inventories grew faster than sales during the month. The reason is that both the inventory and sales levels are large enough that a difference of several tenths of a percentage point in monthly growth does not necessarily move the ratio by one-hundredth once it is rounded. The more pronounced change is the decline from 1.37 in July 2025, when inventories were higher relative to sales.

The report remains subject to revisions. Census said historical monthly retail and wholesale estimates are expected to be revised using historical corrections and results from the 2023 and 2024 Annual Integrated Economic Survey. Revised not-seasonally-adjusted estimates are tentatively scheduled for September 28, with corresponding adjusted estimates expected on October 26. The agency said retail revisions are expected to appear in the August business inventories report, while wholesale revisions are expected to be reflected in the September report.

The next Manufacturing and Trade Inventories and Sales release is scheduled for October 15, 2026, covering August. That report will provide the next broad reading on whether inventories continue to grow faster than sales and is expected to incorporate the anticipated retail revisions.