U.S. wholesale sales grew 0.3% in June compared to May, following a decrease of 0.4% in May over the prior month, with especially strong rebounds in sales of apparel and petroleum products. The inventory-to-sales ratio remain flat, suggesting wholesalers and distributors are selling the merchandise they have purchased, even after some inventory building to get ahead of tariffs.
However, recent signs of slower growth in the U.S. economy as a whole, including a weak July jobs report, could point to slower sales ahead, says Alex Chausovsky, director of analytics and consulting for Bundy Group, an investment bank.
“Weakening economic data suggests that, with the cost of capital remaining high, many firms may opt to conserve cash and not tie it up in idle inventories,” Chausovsky says. “This may also generate some additional inflationary pressure for certain product categories as demand potentially outstrips supply in the coming months.”
He says the Federal Reserve’s funds rate of over 4% puts it in “economically restrictive territory,” keeping the cost of borrowing relatively high. “A more neutral rate would be in the 3% range,” he says. While the CME Group’s FedWatch Tool, which projects interest rate changes based on bond future prices, projects an 86.5% chance of a 25 basis-point cut in the Fed funds rate in September, bringing it down to around 4%, it sees zero chance of a 3% rate before March 2026.
Durable goods inventories decline relative to sales
The overall inventory-to-sales ratio remained steady at 1.30 in June, unchanged from May, and down from 1.35 in June 2025. However, there was a more noticeable dip in the ratio for durable goods, which slipped to 1.66 in June, down from 1.67 in May, 1.74 in January and 1.79 in June 2024. That suggests wholesalers and distributors in the durable goods sectors purchased inventory ahead of threatened tariffs early in the year and now are selling off those goods.
“It makes sense that the build-up of inventory would be more concentrated in durable goods, not only because they have a longer shelf life, but because they’re typically much more expensive, so the tariff hit would be that much larger in the absence of extra inventory,” Chausovsky says. “The drawdown in this category in recent months underscores the likelihood that most of the tariff impact to inflation is still ahead of us.”
The nondurable inventory-to-sales ratio remained steady at 0.95 in May and June 2025, the same as in June 2024.
Year-over-year, total wholesale sales increased 5.5% over June 2025, while durable goods sales were up 7.6% and nondurables 3.5%. Durable sales increased 0.5% in June after growing 0.2% in May; nondurable sales grew 0.1% in June after declining 1.0% in May.
Which wholesale product categories rose or fell in June?
Here are some additional highlights of the June 2025 wholesale trade report:
- In durable goods, the fastest growth in June versus May was in miscellaneous durables (up 3.1%), hardware (2.2%), machinery (0.8%), Metals (0.6%) and computer equipment (0.5%.) The only three categories that declined were in furniture (-2.2%), automotive (-0.7%) and (lumber -0.1%).
- In nondurable goods, the strongest growth month-over-month was in petroleum and apparel (both up 0.9%), drugs (0.8%) and alcohol (0.7%). The five categories that declined were farm products (-1.8%), paper and chemicals (both down -1.4%), groceries (-0.7%) and miscellaneous nondurables (-0.6%).
- Total wholesale inventories increased 0.1% in June compared to May when they declined 0.3%. They were up 1.3% compared to June 2025. Durable goods inventories rebounded from a 0.7% monthly decrease in May to increase 01% in June, and were up 0.2% year over year. In nondurables, June inventories were 0.1% larger than in May when they grew 0.4% and up 3.3% compared to June 2024.
