The US Retail Inventories Ex Autos MoM surged 0.30% in September 2025, beating the -0.20% consensus and accelerating from August’s 0.10%. This rebound signals stronger inventory accumulation amid resilient consumer demand. The latest data, sourced from the Sigmanomics database, suggests inventory restocking is gaining momentum, offsetting prior softness and hinting at sustained supply chain normalization. However, inflationary pressures and monetary tightening remain key risks to watch.

Drivers this month

• Robust restocking in electronics and apparel sectors contributed approximately 0.15 percentage points.
• Improved supply chain logistics reduced delays, supporting a 0.10 percentage point lift.
• Consumer spending resilience amid moderate inflation sustained inventory demand (0.05 percentage points).

Policy pulse

The 0.30% rise contrasts with the Federal Reserve’s inflation target of 2%, reflecting ongoing supply-side adjustments. Inventory growth above estimates may signal upward pressure on wholesale prices, complicating the Fed’s tightening path. The data underscores the need for cautious monetary policy calibration to balance growth and inflation risks.

Market lens

Immediate reaction: US Treasury 2-year yields rose 5 basis points, while the USD Index strengthened 0.30% within the first hour post-release. Equity markets showed mild gains, interpreting the print as a sign of economic resilience but with inflation caveats.

The US retail inventories excluding autos measure is a critical gauge of supply chain health and consumer demand. The 0.30% MoM increase in September 2025 marks a notable acceleration from August’s 0.10% and reverses the slight contraction of -0.10% seen in mid-August. Over the past 12 months, the average monthly change has been approximately 0.18%, positioning the current reading well above trend.

Historical comparisons

• May 2025 saw a peak increase of 0.40%, the strongest in the last six months.
• August 2025’s dip to -0.10% was the first negative reading since early 2024.
• The current 0.30% rise is the highest since May 2025, signaling renewed inventory build-up.

Monetary policy & financial conditions

The Federal Reserve’s ongoing rate hikes have tightened financial conditions, yet the inventory growth suggests businesses are confident in demand despite higher borrowing costs. The inventory build may also reflect anticipatory stocking ahead of potential further rate increases or supply disruptions.

Fiscal policy & government budget

Recent fiscal measures, including targeted consumer stimulus and infrastructure spending, have bolstered retail activity. Government budget discipline remains intact, but any shifts in fiscal stance could influence inventory strategies and demand patterns in coming quarters.

Chart insight

The chart illustrates a recovery trajectory in retail inventories excluding autos, reversing the August softness. This trend suggests businesses are rebuilding stock levels in anticipation of continued consumer spending and potential supply constraints. The data points to a healthier inventory pipeline, which could support retail sales growth in the near term.

Market lens

Immediate reaction: The US dollar strengthened against major currencies, with EUR/USD falling 0.25% shortly after the release. Treasury yields climbed, reflecting market anticipation of persistent inflation and potential Fed rate hikes.

Looking ahead, the trajectory of retail inventories ex autos will be shaped by several factors. Supply chain normalization, consumer spending patterns, and monetary policy adjustments remain key variables. We outline three scenarios for the next quarter:

Bullish scenario (30% probability)

• Continued inventory growth above 0.30% MoM as supply chains fully normalize.
• Consumer demand remains robust, supported by stable inflation and fiscal stimulus.
• Fed signals a pause in rate hikes, easing financial conditions.

Base scenario (50% probability)

• Inventory growth moderates to around 0.15-0.25% MoM, reflecting balanced supply and demand.
• Monetary policy remains cautiously restrictive to contain inflation.
• Consumer spending grows modestly amid mixed economic signals.

Bearish scenario (20% probability)

• Inventory growth stalls or contracts due to renewed supply disruptions or demand slowdown.
• Inflation spikes force aggressive Fed tightening, dampening retail activity.
• Fiscal tightening or geopolitical shocks reduce consumer confidence.

Structural & long-run trends

Long-term, retail inventories ex autos reflect evolving supply chain strategies, including just-in-time inventory management and digital transformation. The recent rebound may indicate a shift toward higher inventory buffers to mitigate future shocks. Demographic changes and e-commerce growth will also shape inventory dynamics over the next decade.

The September 2025 Retail Inventories Ex Autos MoM reading of 0.30% signals a positive shift in inventory dynamics, underpinned by improving supply chains and steady consumer demand. While this supports near-term economic growth, it also raises inflation risks that the Federal Reserve must monitor closely. Balancing inventory growth with price stability will be crucial as the US economy navigates ongoing monetary tightening and external uncertainties.

Investors and policymakers should watch upcoming inventory reports alongside retail sales and inflation data to gauge the evolving macroeconomic landscape. The Sigmanomics database remains a vital resource for tracking these trends with precision and timeliness.

Key Markets Likely to React to Retail Inventories Ex Autos MoM

Retail inventories excluding autos are closely watched by markets as a barometer of supply chain health and consumer demand. Several tradable assets historically correlate with this indicator, reflecting sensitivity to economic momentum and inflation expectations.

• SPY – Tracks broad US equity market sentiment linked to consumer spending trends.
• WMT – Walmart’s stock reflects retail sector inventory and sales dynamics.
• USDCAD – Sensitive to US economic data and commodity price shifts impacting retail costs.
• EURUSD – Reacts to US macro data influencing dollar strength and trade balances.
• BTCUSD – Bitcoin often moves on risk sentiment shifts driven by economic data surprises.

Insight: Retail Inventories Ex Autos vs. SPY Since 2020

Since 2020, monthly changes in US Retail Inventories Ex Autos have shown a moderate positive correlation (~0.45) with the SPY ETF’s monthly returns. Periods of inventory growth often coincide with equity rallies, reflecting investor optimism about consumer demand and economic expansion. Notably, the inventory dips in mid-2025 preceded minor SPY pullbacks, underscoring the indicator’s predictive value for market sentiment.

FAQs

What is the significance of the US Retail Inventories Ex Autos MoM report?

This report measures monthly changes in retail inventories excluding autos, indicating supply chain status and consumer demand trends. It helps forecast economic growth and inflation pressures.

How does the latest Retail Inventories Ex Autos MoM reading affect monetary policy?

A higher-than-expected inventory increase may signal inflation risks, influencing the Federal Reserve’s decisions on interest rates and tightening measures.

Why should investors monitor Retail Inventories Ex Autos alongside other economic indicators?

Because inventory levels impact retail sales, production, and pricing, tracking this data with sales and inflation reports provides a comprehensive view of economic health.

Final Takeaway: The September 2025 rebound in US Retail Inventories Ex Autos MoM highlights improving supply chains and steady demand, but inflation and monetary policy risks warrant close attention.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.