Business Inventories - Business inventories remained unchanged for the second consecutive month in May [1] - January, February, and March saw increases of 04% (four-tenths), 02% (two-tenths), and 01% (one-tenth) respectively, suggesting earlier inventory build-up [1] - The industry is closely monitoring inventory levels to determine if excess inventory exists and whether sales can reduce it [2] Homebuilder Sentiment - The National Association of Home Builders (NAHB) sentiment index rose one point to 38 in July [3] - An index value below 50 is considered negative, and the index has been negative for 15 consecutive months [3] - 38% of builders reported cutting prices in July, the highest share since NAHB began tracking this in 2022 [4] - Current sales conditions rose one point to 36, sales expectations for the next 6 months increased three points to 43, and buyer traffic dropped one point to 20, the lowest since the end of 2022 [4][5] - Regionally, builder sentiment was strongest in the Northeast (rose one point), flat in the Midwest, and weakest in the South and West [5] Factors Affecting Homebuilder Sentiment - The recently passed budget act, providing tax relief for households, homebuilders, and small businesses, contributed to a slight boost in sentiment [4] - Elevated interest rates continue to be a major headwind, impacting affordability [4]