Calendar › Business inventories › 2026-10-15
Business Inventories +0.4% (vs 0.4% Est) — Sales Outpace Stock, Ratio Falls to 1.33
Fundamentals · 2026-10-15
Business inventories rose 0.4% m/m in August to $2,818.8 billion, in line with a 0.4% consensus (TradingEconomics), while sales rose 1.1% to $2,123.5 billion; July inventories revised to +0.9% from 0.8%; on the year, inventories +4.6% against sales +10.2%; the inventories-to-sales ratio fell to 1.33 from 1.34, against 1.40 a year ago; by sector, manufacturers' inventories +0.5% on flat shipments, so their ratio rose to 1.48; merchant wholesalers +0.5% on sales +1.8%, ratio 1.18; retailers +0.2% on sales +1.3%, ratio 1.36; auto dealers' ratio 1.98 against 1.91 a year ago. August data; retail levels rebased in the 28 September annual revision.
What It Changes
- Very little, and it was expected. Inventories rose exactly the 0.4% consensus (TradingEconomics). The release is six and a half weeks old and every component except the retail detail was already published.
- August was a month when goods moved. Sales rose 1.1% against inventories' 0.4%, so stock fell relative to sales in retail and wholesale. That matches August's strong retail sales, now revised up to 1.3%.
- Factories are the exception. Manufacturers' shipments were flat while their inventories rose 0.5%, the largest dollar build of the three sectors. With Philadelphia's new orders falling sharply in October, factory stock is the line to watch.
- The ratio is flattered by prices, again. Sales are up 10.2% on the year in dollars and wholesale sales 15.6%, much of it energy prices. A nominal ratio falls when prices rise faster than volumes.
Impact
- USD — Neutral — an in-line, six-week-old release with no history of moving the dollar. DXY is −0.53% on the day at 10:34 ET, extending its overnight fall.
- US Indices (ES / NQ / YM / RTY) — Neutral — ES was −0.04% from 09:59 to 10:05 ET, noise. On the day at 10:34 ET: ES −0.22%, NQ −1.16%, YM +0.69%, RTY +0.64%.
- The one transmission line is GDP arithmetic: inventory investment is a direct component of output, and a steady build adds to third-quarter growth.
- Gold (GC) — Neutral — no channel from this release; gold is +1.78% on the day at 10:34 ET on yields and the haven bid.
Inside The Number
Manufacturers' and trade inventories totalled $2,818.8 billion at the end of August, up 0.4% (±0.1%) from July and up 4.6% (±0.4%) from August 2025. Consensus was 0.4%. Sales, the combined value of distributive trade sales and manufacturers' shipments, came in at $2,123.5 billion, up 1.1% (±0.1%) on the month and 10.2% (±0.3%) on the year. July's inventory change was revised to +0.9% from 0.8%.
The level has moved since last month's brief, and not because of August. The 28 September annual revision rebased the retail series, so July inventories now read $2,807.1 billion against $2,764.7 billion first published, and July's ratio reads 1.34 against 1.30. Comparisons in this brief use the revised figures throughout.
Sales outran stock. A 1.1% rise in sales against 0.4% in inventories pulled the inventories-to-sales ratio down to 1.33 from 1.34. A year ago it was 1.40. Total inventories rose $11.7 billion in the month.
Manufacturers built the most and sold the least. Factory inventories rose 0.5%, adding $5.1 billion, 44% of the month's build, while shipments were flat at 0.0%. Their ratio rose to 1.48 from 1.47. On the year, manufacturers' inventories are up only 2.6% against shipments up 8.5%, so the build is recent rather than long-running. It is the one sector where stock grew faster than sales in August.
Wholesalers cleared stock. Merchant wholesaler inventories rose 0.5%, adding $4.4 billion, while sales rose 1.8%. The ratio fell to 1.18 from 1.19, against 1.28 a year ago. Wholesale inventories are still up 6.4% on the year, the fastest of the three sectors, but wholesale sales are up 15.6%, a large part of it likely energy prices. In August the warehouse overhang this feed flagged in the summer looks like it is being sold through, at least in dollars.
Retail cleared stock too. Retail inventories rose 0.2% while retail sales rose 1.3%, and the ratio fell to 1.36 from 1.38. Excluding autos, retail inventories were unchanged and the ratio fell to 1.19, below last August's 1.22.
Autos are the build inside retail. Motor vehicle and parts dealers' inventories rose 0.8% in the month and 6.5% on the year, against sales up 2.3% on the year. Their ratio held at 1.98, up from 1.91 a year ago, the clearest accumulation in the release. Building materials stock is up 7.4% on the year against sales up 5.4%, with the ratio at 2.53 against 2.49. Both sit in the most rate-sensitive corners of consumer spending.
The discretionary categories are leaner. Clothing's ratio is 2.02 against 2.05 a year ago. General merchandise is 1.39 against 1.37, and department stores 2.60 against 2.57, both slightly heavier. Food and beverage stores sit at 0.82 against 0.80.
The nominal caveat still applies. Census does not adjust this release for prices. With wholesale sales up 15.6% in dollars on the year and PPI final demand goods up 9.8% over the year to September, a large part of the falling ratio is the price of what is being sold, not more goods leaving shelves. In goods rather than dollars, inventories are likely less lean than 1.33 suggests.
And the vintage. This is August data. Since then, September retail sales rose only 0.2% outside gasoline, and Philadelphia's October new orders fell 24.9 points. If demand softened in September and October, the August clearing may not have continued, and September's report on 17 November will show it.
The Internals
Inventories and sales by sector, seasonally adjusted, in millions of dollars:
Sector · Inventories, August · Inventories, July · Inventories m/m · Inventories y/y · Sales m/m · Sales y/y
Total business · 2,818,757 · 2,807,083 · Up 0.4% · Up 4.6% · Up 1.1% · Up 10.2%
Manufacturers · 972,382 · 967,298 · Up 0.5% · Up 2.6% · Unchanged · Up 8.5%
Merchant wholesalers · 964,199 · 959,769 · Up 0.5% · Up 6.4% · Up 1.8% · Up 15.6%
Retailers · 882,176 · 880,016 · Up 0.2% · Up 4.8% · Up 1.3% · Up 5.5%
Where the $11.7 billion build came from:
Sector · Change in inventories · Share of the build
Manufacturers · Up 5,084 · 44%
Merchant wholesalers · Up 4,430 · 38%
Retailers · Up 2,160 · 19%
Total · Up 11,674 · 100%
Inventories-to-sales ratios:
Sector · August 2026 · July 2026 · August 2025 · Read
Total business · 1.33 · 1.34 · 1.40 · Leaner in dollars
Manufacturers · 1.48 · 1.47 · 1.56 · The only sector to rise on the month
Merchant wholesalers · 1.18 · 1.19 · 1.28 · Inflated sales flatter it
Retailers · 1.36 · 1.38 · 1.37 · Back to last year's level
The prior-month path, as revised:
Measure · August 2026 · July 2026
Total inventories m/m · Up 0.4% · Up 0.9%
Total sales m/m · Up 1.1% · Up 0.5%
Manufacturers' inventories m/m · Up 0.5% · Up 0.4%
Wholesale inventories m/m · Up 0.5% · Up 1.4%
Retail inventories m/m · Up 0.2% · Up 0.9%
Where The Stock Is
Retail inventories by kind of business, seasonally adjusted, in millions of dollars:
Category · Inventories, August · m/m · y/y · Ratio, August · Ratio, a year ago
Motor vehicle and parts dealers · 276,921 · Up 0.8% · Up 6.5% · 1.98 · 1.91
General merchandise stores · 113,801 · Up 0.4% · Up 6.1% · 1.39 · 1.37
Building materials and garden · 112,231 · Unchanged · Up 7.4% · 2.53 · 2.49
Food and beverage stores · 69,589 · Down 0.3% · Up 2.5% · 0.82 · 0.80
Clothing and accessories · 53,370 · Up 0.1% · Up 2.5% · 2.02 · 2.05
Furniture, electronics and appliances · 33,030 · Up 0.4% · Up 4.4% · 1.80 · 1.78
Department stores · 10,317 · Up 0.9% · Up 3.5% · 2.60 · 2.57
Retail excluding autos · 605,255 · Unchanged · Up 4.1% · 1.19 · 1.22
- Autos carry the build. Dealers hold 31% of retail inventories, their stock is up 6.5% on the year against sales up 2.3%, and their ratio has risen more against a year ago than any other category in the table.
- Building materials are heavy too. Stock up 7.4% on the year against sales up 5.4%.
- Outside autos, retail is lean. The ex-autos ratio of 1.19 is below last year's 1.22, and ex-autos stock was flat in August.
Against This Morning's Open
- The Open listed business inventories at 10:00 with a 0.4% consensus after 0.8%, tagged for USD only — The Open. It printed 0.4%, exactly as expected, and July was revised to 0.9%. It had no effect on the read The Open set up.
What This Sets Up
- Next business inventories: Tuesday, 17 November, 10:00am ET, covering September (Census). Wholesale estimates will be revised on 26 October and reflected in that release.
- The read to confirm or break is whether manufacturers keep building on flat shipments. A second month of factory stock rising faster than shipments would point to an unwanted build, in line with Philadelphia's October orders drop.
- Watch the auto dealers' ratio. At 1.98 against 1.91 a year ago, it is the clearest accumulation in the release, in the most rate-sensitive category.
- Watch the total ratio against September's soft retail sales. If sales outside gasoline stalled in September as the advance report suggests, the ratio's fall should stop.
What Is This?
- What it is: The Census Bureau's Manufacturing and Trade Inventories and Sales report, released at 10:00am ET about six weeks after the month ends. It combines three surveys: manufacturers' shipments and inventories, merchant wholesalers, and retailers. Values are in dollars, adjusted for seasonal and trading-day effects, but not for price changes. Manufacturing and wholesale figures are already published by the time it comes out; the new information is the retail inventory detail and the combined ratio.
- Why it matters: Inventory investment is a direct component of GDP, so a build adds to growth even when it reflects goods nobody bought. The inventories-to-sales ratio shows whether businesses are carrying too much stock, which leads to discounting and production cuts, or too little, which leads to restocking. With the funds rate at 3.75-4.00% (Fed), carrying stock is expensive.
- How to read it: Compare the inventory change with the sales change: stock rising faster than sales is a build, slower is a draw. Read the ratio by sector, because the total hides opposite moves. Remember both halves are nominal, so in a month of rising prices the ratio falls without any extra goods leaving shelves. And remember the lag: it reports a month that retail sales has already described.
Want the full explainer? Economic News Events, Explained breaks down this release and every other one we cover, in plain English.
_For informational purposes only. Not investment advice._