US Business Inventories Rise 0.4% in August

The us business inventories august report showed companies continuing to rebuild their stockpiles. Inventories rose 0.4% after surging 0.9% in July, the Commerce Department’s Census Bureau said Thursday — in line with economists’ expectations and up 4.6% from a year earlier.

Businesses have been rebuilding inventories that were drawn down for five straight quarters amid robust domestic demand, driven mostly by consumer spending and investment in AI. But the restocking effort is relying heavily on imports, which drag on GDP growth.

Sales Outpace Stockpiles

The details were encouraging: business sales shot up 1.1% in August after rising 0.5% in July. At August’s sales pace, it would take 1.33 months to clear shelves, down from 1.34 in July.

Wholesale inventories rose 0.5% and manufacturer stocks also climbed 0.5%. Retail inventories increased 0.2%, with motor vehicle stocks up 0.8% as previously reported.

The GDP Math

Economists estimate trade could subtract as much as 2.5 percentage points from third-quarter GDP growth — but they expect restocking to largely offset the hit. Growth estimates for the quarter cluster around a 3.0% annualized rate, up from the 2.2% pace of the April-June quarter, when inventories subtracted 0.53 percentage point from growth.

Source: Reuters