WASHINGTON, July 8 (Reuters) – U.S. 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%, revised down from the 0.3% increase estimated last month, the Commerce Department’s Census Bureau said on Wednesday. Inventories, a key part of gross domestic product, rose 0.7% in April. They advanced 4.0% 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% annualized rate in the second quarter. The economy grew at a 2.1% 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% while computer equipment inventories surged 4.0%, a jump likely related to an artificial intelligence investment boom. Furniture inventories rose 0.5%, while those of hardware increased 0.6%. But metal inventories dropped 2.8%. Petroleum stocks dropped 5.7%.
Sales at wholesalers increased 3.4% in May after advancing 2.2% 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.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
