US business inventories were unchanged in June, missing forecasts for a 0.1% increase, as a rise in wholesale stocks was offset by a decline at retailers. The flat reading followed a 0.4% gain in May, while inventories were up 3.0% from a year earlier. Inventories have now been drawn down for five consecutive quarters amid solid domestic demand, and they exerted downward pressure on second-quarter gross domestic product growth even as the economy expanded at a 1.5% annualized rate and domestic demand posted its fastest increase in more than three years, driven by personal consumption and artificial intelligence-related capital spending. Retail inventories fell 0.2% in June after a 0.8% increase in May, versus a preliminary estimate for no change, while retail inventories excluding autos, which feed into the GDP calculation, dropped 0.4%, revised down from a previously reported 0.2% decline. Motor vehicle inventories rose 0.4%, wholesale inventories increased 0.2%, and manufacturing inventories edged up 0.1%. Business sales fell 1.1% in June after a 2.1% drop in May, lifting the inventories-to-sales ratio to 1.30 months from 1.28 months, versus 1.39 months a year earlier. The inventory trend suggests companies may have scope to raise production if demand holds, though continued sales declines could prompt faster inventory adjustment.