U.S. wholesale inventories growth revised lower in May, signaling softer GDP support

Traders Union
All News
Financial News
US wholesale inventories revised lower

Highlights

U.S. wholesale inventories rose 0.1% in May, revised down from 0.3%, while annual growth reached 4.0%, signaling softer GDP support.
Wholesaler sales surged 3.4% in May, pushing the clearing period to 1.15 months—the shortest since April 2012—as the inventories-to-sales ratio hit 1.31.
May import volumes hit a 14-month high, widening the trade deficit, with category gains in professional and computer equipment offset by declines in metals and petroleum.

Commerce data points to weaker restocking

As reported by Reuters, citing the Commerce Department's Census Bureau, stocks at U.S. wholesalers edge up 0.1% in May, revised down from the 0.3% increase estimated last month. That follows a 0.7% rise in April, while inventories increase 4.0% from a year earlier in May.

Inventories are a key component of gross domestic product, and business stockpiles have been drawn down for four straight quarters. Economists expect rebuilding to offset part of the drag on GDP from a wider trade gap, while the Atlanta Federal Reserve's model currently forecasts the economy will grow at a 1.4% annualized rate in the second quarter after expanding at a 2.1% pace in the January-March period.

The government reports on Tuesday that imports surge to a 14-month high in May, widening the trade deficit. Economists partly attribute that increase to front-loading by businesses seeking to avoid higher prices and shortages linked to the war in the Middle East.

Sector inventory trends reflect import and demand shifts

Some of those imports end up in inventories across selected wholesale categories. Stocks of professional equipment increase 1.2%, computer equipment inventories jump 4.0%, furniture inventories rise 0.5%, and hardware inventories gain 0.6%.

Other categories weaken, with metal inventories falling 2.8% and petroleum stocks dropping 5.7%. The rise in computer equipment stockpiles is likely tied to an artificial intelligence investment boom.

Sales at wholesalers increase 3.4% in May after a 2.2% gain 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-to-sales ratio stands at 1.31 months in May 2025.

U.S. container import volumes jumped in June as companies pulled shipments forward to get ahead of higher ocean freight costs and potential tariff changes. Our earlier article noted that the surge was driven largely by stronger flows from China, while overall first-half import volumes still pointed to short-term timing shifts rather than a broad-based demand rebound.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.