Business inventories across the U.S. were unchanged in May, according to the Commerce Department’s latest report, marking a second month of flat growth. Economists had anticipated the stagnation, as overall inventory levels remain 1.7% above last year.

Retail inventories climbed 0.3%, with motor vehicle inventories up 0.6%. Wholesale inventories declined 0.3%, and manufacturer inventories edged up 0.1%. Business sales fell 0.4%, lifting the inventory-to-sales ratio to 1.39 months—its highest level since April. The first quarter saw heavy pre-tariff stockpiling, adding 2.59 percentage points to GDP. Yet, record import-driven trade deficits more than erased those gains, leading to a 0.5% economic contraction.

For material handling professionals, these numbers reflect a market in flux: slower turnover means longer storage times, lower equipment utilization, and pressure on labor efficiency. Operations may need to adapt through leaner inventory strategies and investments in technology to optimize throughput in an uncertain demand environment.