Unit sales of domestically produced cars and light duty trucks (including sport utility vehicles and mini-vans). Individual manufacturers report usually report sales on the first business day of the month. Motor vehicle sales are good indicators of trends in consumer spending. Why Investors Care
| Released on 10/2/07 For Sep 2007 | ||||||||||||
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Highlights
Vehicle sales were solid in September but are likely to prove a bit weaker than the strong total in August. Unit sales of U.S.-made light vehicles came in at a 12.2 million annual rate vs. a 12.4 million rate in August. The split between cars, at 5.1 million, and light trucks, at 7.3 million, is in line with trend. Except for August, September's sales are the best since February. The month's sales of imports appear to be a little better than domestic made, pointing to a total annual rate of about 16.0 million vs. 16.3 million in August.
Though sales were solid, the month-to-month dip is likely to soften expectations for retail sales data a week from Friday. Note that vehicle sales are translated into dollar figures for the Commerce Department report. Chain stores will report their September results a week from Thursday.
Motor vehicle sales proved surprisingly strong in August despite all of the market turmoil, coming in at a 12.6 million annual rate for domestic-made vehicles, compared to 11.4 million in July. Sales of trucks were especially strong, at a 7.5 million rate and the best rate since February. With uncertainty on how consumer confidence is holding up after the subprime impact on the stock markets and on lending standards, the September motor vehicle sales number will be an important indicator of whether the consumer is still willing to spend. This is a critical issue since if either rising mortgage payments or loss of consumer confidence cut into auto sales, that could be an early warning of flattening economic growth overall. Motor vehicle sales are clearly a key bellwether for turns in the business cycle.
Motor vehicle sales Consensus Forecast for September 07: 12.4 million-unit rate
Range: 12.0 to 12.6 million-unit rate
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Motor vehicles sales slowed notably in 2006 as a result of higher interest rates and a jump in gasoline prices but remained at reasonable levels due to strong income growth. Late in 2006 and in early 2007, gasoline prices were down from 2006 highs but moderating economic growth kept sales from rebounding. Truck shares hit their peak in 2005 when gasoline was cheap and remain sharply lower since gasoline prices spiked in 2006. |
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