Friday morning, the Department of Commerce released its report on business inventories and sales in the month of October, showing that inventories fell by much more than economists had been anticipating.
The report showed that business inventories fell by 0.6 percent in October following a revised 0.4 percent decrease in September. Economists had expected inventories to fall by a more modest 0.2 percent, which would have matched the decrease originally reported for the previous month.
A 1.1 percent decrease in merchant wholesalers' inventories contributed to the bigger than expected drop in business inventories, with manufacturers' inventories also showing a notable 0.6 percent decrease. Retailers' inventories edged down by a more modest 0.1 percent.
The Commerce Department also said that business sales showed a steep 3.5 percent decline in October after falling 2.4 percent in the previous month. The steep drop reflected notable decreases in sales by manufacturers, retailers, and merchant wholesalers.
With sales falling at a faster rate than inventories, the business inventories/sales ratio rose to 1.34 in October from 1.30 in September. The ratio came in at 1.26 in October of 2007.
On an annual basis, business inventories were up 4.6 percent compared to the same month last year, while business sales were down 1.6 percent year-over-year.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.