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Islamic State has "increased the lethality of attacks" and "expanded into new areas," Sales said.
Meanwhile, in areas of Syria and Iraq, Islamic State still has roughly 15,000 fighters, said James Jeffrey, the envoy to the international coalition to fight Islamic State.
Some 2,000 foreign extremist fighters remain in the custody of the US-backed and Kurdish-led Syrian Democratic Forces (SDF), with the US urging countries around the world to take back their citizens and bring them to justice.
President Donald Trump appeared to be especially frustrated with the slow pace of European nations taking back their citizens from the prison camps.
"We have thousands of ISIS fighters that we want Europe to take and let's see if they take them and if they don't take them we will probably have to release them to Europe," Trump told reporters outside the White House.
Meanwhile, Jeffrey stressed that Islamic State maintains strongholds in Syria in territories outside the US and SDF field of operations in the north-east, including regions controlled by Syrian President Bashar al-Assad.
As the world's focus in recent years has turned to Islamic State, al-Qaeda has been able to rebound, Sales cautioned.
"Al-Qaeda is as strong as it has ever been," Sales said.
US officials have continued to decline to comment on reports that Hamza bin Laden, the son of the former al-Qaeda leader Osama bin Laden, was killed.
"Hamza bin Laden was very threatening to our country and you can't do that," Trump said, but declined to comment on the reports.
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