Sales of new motor vehicles are down to a 13.3 million unit annual rate in December after a small upward revision to 14.2 million units in November. This is below the consensus of 13.7 million units in an Econoday survey. The decline is mostly in domestically produced motor vehicles which are down to 10.5 million units in December after 11.4 million units in November while sales of foreign built motor vehicles see a dip to 2.8 million units from 2.9 million units.

Total sales of passenger cars are down, but less than sales of light trucks which include minivans, SUVs, and crossovers. Passenger car sales are lower at 2.785 million units in December from 31.57 million units in November, while light truck sales are down to 10.529 million units from 11.056 million units. The light truck category continues to dominate overall sales of motor vehicles with a 79 percent share. Consumers' preference for light trucks is entrenched due to the versatility and comfort of manufacturers' offerings.

Sales of heavy trucks are off in December at 441,000 after an uptick to 510,000 in November. Some businesses may have been buying trucks while financing costs were slightly improved, and dealers were inclined to clear out inventory in anticipation of slower sales and higher interest rates.

After falling sharply to a 14.1 million annualized rate in November, unit vehicle sales in December are expected to fall further to a 13.7 million rate.

Unit sales of motor vehicles, published by the Bureau of Economic Analysis at the beginning of each month, include domestic sales and imports. Domestics are sales of autos produced in the U.S., Canada, and Mexico. Imports are U.S. sales of vehicles produced elsewhere. The data track all passenger cars and light trucks up to 14,000 pounds gross weight (including minivans and sport utility vehicles). Though totals include a relatively small portion sold to businesses, motor vehicle sales are good indicators of trends in consumer spending and often are considered a leading indicator at business cycle turning points.

Since motor vehicle sales are an important element of consumer spending, market players watch this closely to get a handle on the direction of the economy. The pattern of consumption spending is one of the foremost influences on stock and bond markets. Strong economic growth translates to healthy corporate profits and higher stock prices. The bond market focus is on whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth. This balance was achieved through much of the nineties. For this reason alone, investors in the stock and bond markets enjoyed huge gains during the bull market of the 1990s.

Retail sales growth did slow down in tandem with the equity market during the 2001 recession but then, boosted by a low interest rate environment, rose sharply through 2007 before falling sharply during the Great Recession. Sales then recovered and, once again boosted by low rates, began a long period of steady and favorable growth.

In a more specific sense, auto and truck sales show market conditions for auto makers and the slew of auto-related companies. These figures can influence particular stock prices and provide insight to investment opportunities in this industry. Given that most consumers borrow money to buy cars or trucks, sales also reflect confidence in current and future economic conditions.