US wholesale inventories in May revised lower

[WASHINGTON] US wholesale inventories rose far less than initially thought in May, which could temper expectations that restocking would provide a significant lift to economic growth in the second quarter.

Stocks at wholesalers edged up 0.1 per cent, revised down from the 0.3 per cent increase estimated last month, the Commerce Department’s Census Bureau said on Wednesday (Jul 8). Inventories, a key part of gross domestic product, rose 0.7 per cent in April. They advanced 4.0 per cent on a year-over-year basis in May.

Business inventories have been drawn down for four straight quarters. Economists expect the rebuilding of inventories will blunt some of the anticipated drag on GDP from the trade gap. The Atlanta Federal Reserve’s model is currently forecasting gross domestic product will increase at a 1.4 per cent annualised rate in the second quarter. The economy grew at a 2.1 per cent pace in the January-March quarter.

The government reported on Tuesday a surge in imports to a 14-month high in May, widening the trade deficit. Economists partly attributed the rise in imports to front-loading by businesses eager to avoid higher prices and shortages stemming from the war in the Middle East.

Some of the imports ended up as inventory. Wholesale stocks of professional equipment increased 1.2 per cent while computer equipment inventories surged 4.0 per cent, a jump likely related to an artificial intelligence investment boom. Furniture inventories rose 0.5 per cent, while those of hardware increased 0.6 per cent. But metal inventories dropped 2.8 per cent. Petroleum stocks dropped 5.7 per cent.

Sales at wholesalers increased 3.4 per cent in May after advancing 2.2 per cent in April. At May’s sales pace it would take 1.15 months to clear shelves, the shortest period since April 2012 and down from 1.19 months in April. The inventories/sales ratio was at 1.31 months in May 2025. REUTERS