Wholesale Inventories +0.5% vs 0.7% Est — Sales Up 1.8%, Ratio Back Down to 1.18
Fundamentals · 2026-10-08
Wholesale inventories $964.2 billion at the end of August, up 0.5% (±0.2) (vs 0.7% est, the advance estimate), revised down from that advance figure; July revised up to +1.4% from 1.3%; +6.4% (±1.1) on the year, down from 6.6% in the advance report; sales +1.8% (±0.2) to $817.5 billion, +15.6% (±0.7) y/y, with July's sales revised up to +1.0% from +0.8%; inventories-to-sales ratio 1.18, from 1.20 in July as first published, against 1.28 a year ago; durable inventories +0.8%, nondurable 0.0%; petroleum inventories -3.9% after +6.1%; farm products +6.9%; machinery and farm products made 94% of the month's build; electrical goods sales +3.6%, +35.9% y/y; annual revision due 26 October.
What It Changes
- The overhang worry eased this month. Inventories rose 0.5%, less than the 0.7% advance estimate, while sales rose 1.8%. The inventories-to-sales ratio fell back to 1.18, ending two months of increases from May's 1.15 low. Stock is building more slowly than sales.
- Petroleum turned. Petroleum inventories fell 3.9% in August after rising 6.1% in July. That line had driven much of this year's build, and much of it is price: Census doesn't adjust these figures for inflation.
- Sales are running far ahead of stock. Wholesale sales are up 15.6% on the year against 6.4% for inventories. In nominal terms this is not a slowing economy, and the same price caveat applies: with energy and AI hardware prices rising, the dollar figures overstate volumes.
- For GDP, the build is smaller than first reported. August's inventory gain was revised down by 0.2 percentage points, while July's was revised up by 0.1. The net effect on third-quarter inventory investment is small, and the 26 October annual revision will move all of these numbers again.
Impact
- USD — Neutral — DXY was 102.265 at 09:59 ET and 102.271 at 10:01 (ICE, via Yahoo Finance). A final revision of a second-tier series did not move it.
- US Indices (ES / NQ / YM / RTY) — Neutral — ES was 7,831.25 at 09:59 and 7,836.00 at 10:05 (Yahoo Finance), trading oil and yields rather than inventories.
- The strength in electrical and computer equipment sales is a read-through for AI hardware names, but this release does not move the index.
- Gold (GC) — Neutral — no mechanism worth writing down.
Inside The Number
Merchant wholesalers' inventories were $964.2 billion at the end of August, up 0.5% (±0.2) from a revised July. That is below the 0.7% advance estimate published on 30 September, which was also the consensus (TradingView; The Open carried the same). July was revised up to +1.4% from +1.3%. Over the year, inventories are up 6.4% (±1.1), below the 6.6% the advance report showed. Both changes are statistically significant.
Sales did the work. Wholesalers sold $817.5 billion in August, up 1.8% (±0.2) on the month and up 15.6% (±0.7) on the year. July's sales gain was revised up to 1.0% from 0.8%. Durable goods sales rose 2.5% and nondurables 1.0%. Over twelve months, durable sales are up 20.3% and nondurable 11.1%.
The ratio has stopped rising. The inventories-to-sales ratio fell to 1.18, from 1.20 in July as first published, against 1.28 a year ago. Last month's brief noted the ratio had risen two months in a row from 1.15 in May, the leanest since April 2012. August ends that run. Durable goods are at 1.45 against 1.64 a year ago; nondurables at 0.90 against 0.94.
Two lines made almost all of the monthly build. The $4.4 billion increase in inventories came from machinery, up $2.1 billion (+1.3%), and farm products, up $2.0 billion (+6.9%): together 94% of the total. Metals added $1.3 billion (+3.1%) and electrical goods $0.9 billion (+0.9%). Petroleum fell $1.4 billion (-3.9%), drugs fell $0.8 billion and computer equipment fell $0.2 billion. Durables rose 0.8% and nondurables were flat.
The annual concentration is lower than last month. Over twelve months, inventories rose $58.2 billion. Electrical goods accounted for $19.1 billion and petroleum for $9.3 billion: together 48.8% of the build, from 11.8% of the stock a year ago. Last month's brief put that share at 59.3%. Excluding both, inventories rose 3.7% and sales 10.1%, and the ratio fell to 1.38 from 1.46. Farm products are the new contributor: up $7.3 billion, or 30.0%, over the year, with their ratio rising to 1.25 from 1.16.
Electrical goods and computers are the sales story. Electrical goods sales rose 3.6% on the month to $115.9 billion and are up 35.9% on the year. Computer equipment sales rose 3.8% and are up 29.6%. Electrical inventories are up 23.3% on the year, but sales are growing faster, so that line's ratio fell to 0.87 from 0.96. Drug sales rose 3.5% on the month. Petroleum sales fell 0.4% but are up 32.3% on the year.
Response and revisions. About 53.9% of surveyed companies reported, giving a response rate of 59.8% for sales and 61.7% for inventories. Census will publish revised estimates, based on its 2023 and 2024 annual surveys, on 26 October.
The Internals
Merchant wholesalers, seasonally adjusted, August 2026, millions of dollars:
Line · Sales · m/m · y/y · Inventories · m/m · y/y · Ratio · Ratio a year ago
Total · 817,455 · +1.8% · +15.6% · 964,199 · +0.5% · +6.4% · 1.18 · 1.28
Durable · 414,830 · +2.5% · +20.3% · 602,223 · +0.8% · +6.3% · 1.45 · 1.64
Automotive · 55,334 · +1.9% · +5.2% · 91,295 · +0.7% · +1.7% · 1.65 · 1.71
Furniture · 10,808 · +1.0% · +22.8% · 16,863 · 0.0% · -2.1% · 1.56 · 1.96
Lumber · 18,407 · -0.3% · +3.4% · 31,132 · +0.8% · -0.8% · 1.69 · 1.76
Professional equipment · 67,563 · +1.7% · +20.7% · 68,721 · -0.2% · +8.1% · 1.02 · 1.14
Computer equipment · 36,865 · +3.8% · +29.6% · 28,248 · -0.8% · +19.4% · 0.77 · 0.83
Metals · 23,694 · +1.2% · +32.6% · 41,532 · +3.1% · +4.8% · 1.75 · 2.22
Electrical · 115,873 · +3.6% · +35.9% · 101,208 · +0.9% · +23.3% · 0.87 · 0.96
Hardware · 23,490 · +1.3% · +7.7% · 47,468 · -0.2% · +2.7% · 2.02 · 2.12
Machinery · 61,345 · +2.1% · +13.7% · 161,738 · +1.3% · +4.6% · 2.64 · 2.87
Miscellaneous durable · 38,316 · +5.7% · +24.9% · 42,266 · -0.9% · +0.7% · 1.10 · 1.37
Nondurable · 402,625 · +1.0% · +11.1% · 361,976 · 0.0% · +6.6% · 0.90 · 0.94
Paper · 8,218 · +2.9% · +5.8% · 8,391 · +0.6% · +5.1% · 1.02 · 1.03
Drugs · 112,008 · +3.5% · +9.1% · 100,703 · -0.8% · +3.4% · 0.90 · 0.95
Apparel · 14,176 · +0.6% · +8.0% · 28,473 · +0.6% · -0.2% · 2.01 · 2.17
Groceries · 81,838 · +0.4% · +0.9% · 59,380 · -0.5% · +1.9% · 0.73 · 0.72
Farm products · 25,122 · +0.1% · +20.4% · 31,458 · +6.9% · +30.0% · 1.25 · 1.16
Chemicals · 15,613 · +1.3% · +17.8% · 15,478 · 0.0% · +7.6% · 0.99 · 1.09
Petroleum · 99,795 · -0.4% · +32.3% · 34,470 · -3.9% · +37.0% · 0.35 · 0.33
Alcohol · 15,053 · +1.4% · -2.6% · 25,212 · +1.7% · -1.5% · 1.67 · 1.66
Miscellaneous nondurable · 30,802 · -0.9% · -6.3% · 58,411 · -0.4% · +0.6% · 1.90 · 1.77
Revisions to the headline:
Measure · Advance or first estimate · Final or revised · Change
August inventories, m/m · +0.7% · +0.5% · -0.2pp
August inventories, y/y · +6.6% · +6.4% · -0.2pp
July inventories, m/m · +1.3% · +1.4% · +0.1pp
July sales, m/m · +0.8% · +1.0% · +0.2pp
Where the monthly inventory build came from, millions of dollars:
Line · Change in August · Share of the $4.4 billion build
Machinery · +2,124 · 48%
Farm products · +2,025 · 46%
Metals · +1,253 · 28%
Electrical · +916 · 21%
Petroleum · -1,404 · -32%
Drugs · -827 · -19%
All other lines · +343 · 8%
Total · +4,430 · 100%
The year-over-year build, with and without electrical goods and petroleum:
Measure · Total · Electrical and petroleum · Everything else
Inventory build, $ millions · 58,161 · 28,398 · 29,763
Share of the build · 100% · 48.8% · 51.2%
Share of the stock a year ago · 100% · 11.8% · 88.2%
Inventories, y/y · +6.4% · +26.5% · +3.7%
Sales, y/y · +15.6% · +34.2% · +10.1%
Inventories-to-sales ratio · 1.18 · 0.63 · 1.38
Ratio a year ago · 1.28 · 0.67 · 1.46
Against This Morning's Open
- The Open listed wholesale inventories at 10:00 with a 0.7% consensus and tagged it USD only. It came in at 0.5%, and the dollar did not react.
What This Sets Up
- Annual revision: Monday, 26 October 2026, 10:00 ET. Census will revise seasonally adjusted and unadjusted estimates using its 2023 and 2024 annual surveys, so the ratio history and this year's build will both change.
- September advance estimate: in the Advance Economic Indicators Report, scheduled for 28 October per the 30 September release.
- September final: Monday, 9 November 2026, 10:00 ET.
- What would confirm the read: another month of sales growth above inventory growth, keeping the ratio at or below 1.18.
- What would break it: a renewed rise in the ratio driven by lines other than petroleum and farm products. That would be a broad build rather than price effects.
What Is This?
- What it is: The Census Bureau's Monthly Wholesale Trade Survey, released at 10:00 ET. It measures sales, end-of-month inventories and the inventories-to-sales ratio for merchant wholesalers: the distributors who buy goods and resell them, between the factory and the shop. This is the final estimate for August; the advance inventory figure appeared on 30 September. It is a sample survey of about 4,200 employer firms.
- Why it matters: Inventory change is a direct line in GDP, so a build adds to the quarter it happens in and subtracts from the next one when it unwinds. Wholesale is also where a demand slowdown can show up first, as goods pile up before they reach the shelf.
- How to read it: Read the ratio, not the level. Inventories-to-sales shows how many months of sales the stock represents, and a rising ratio means goods are building faster than they move. Census adjusts for seasonality but not for price changes, so in a year with sharp moves in energy and commodity prices, dollar changes overstate physical volumes. Check the confidence intervals: Census flags any change that isn't statistically significant.
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_For informational purposes only. Not investment advice._