US business inventories remained unchanged in June, falling short of the modest 0.1% increase analysts had projected. This figure follows an upward revision of May's inventory growth from 0.3% to 0.4%, according to the latest data from the Census Bureau. Retail inventories, excluding automobiles, saw a decline of 0.4% in June, a sharper contraction compared to the 0.2% decrease observed in the preceding month.
The report also highlighted a significant downturn in overall business sales for June, which registered a 1.1% drop from May 2026, reaching a total of $2.111 trillion. Despite this monthly decline, sales demonstrated robust growth on an annual basis, climbing 10.0% when compared to June 2025. These sales figures are adjusted for seasonal variations and trading days but do not account for price changes, a factor that could influence the real value of transactions.
For retail forex and CFD traders, shifts in business inventories and sales can offer insights into the health of the US economy, potentially influencing currency valuations (like the USD) and market sentiment towards indices or commodities. Stronger sales and inventory rebuilding could signal economic expansion, while declines might suggest a slowdown.
Inventory-to-Sales Ratio Rebounds Slightly
The inventory-to-sales ratio, a key indicator reflecting how much inventory businesses hold relative to their sales, stood at 1.30 at the end of June. This represents an increase from its lowest point since 2021, though it remains below the 1.39 recorded in June 2025. A lower ratio typically indicates that businesses are carrying less inventory per dollar of sales, implying a reduced buffer against unexpected demand surges.
When inventories are lean relative to sales, it can create conditions conducive to an inventory-rebuilding cycle, particularly if consumer demand holds steady. This scenario could potentially lead to increased production and ordering by companies to replenish their stock. Historically, periods of inventory drawdowns, especially those linked to robust demand, have often preceded an upturn in output as firms endeavor to restock their shelves. Such developments could contribute positively to gross domestic product (GDP) figures in subsequent quarters.
📰 Based on reporting from: ForexLive →