Sales of new motor vehicles are down to 15.0 million units at an annualized rate in May after an upward revision to 16.1 million units in April. The level is below the consensus of 15.3 million units in the Econoday survey of forecasters. The slower pace of sales for May is expected after the jump higher in April and appears to be closer to the underlying trend for 2023 at least so far and is above the pace of sales in 2022. Sales of domestically produced motor vehicles are down to 12.0 million units in May after 12.7 million units in April. Domestically produced motor vehicles account for 80 percent of all sales in May.

Sales of passenger cars are down to 3.114 million units in May after 3.277 million units in April. Sales of light trucks are down to 11.931 million units after 12.812 million units in the prior month. Passenger car sales accounted for 21 percent of total sales while light trucks which include SUVs, crossovers, and minivans had a 79 percent share. Buyers of motor vehicles overwhelmingly prefer the light trucks category. This segment of motor vehicles sales now seems impervious to factors like elevated fuel costs, possibly because of the increased availability of units with hybrid engines. However, sales of passenger cars present more options for electric vehicles and could benefit from greater consumer awareness of choice and price.

Sales of heavy trucks are up to 558,000 units in May after 538,000 units in April. Despite higher financing costs, businesses may be investing in needed upgrades as outdoor work picks up in the spring and summer months.

At 15.3 million, unit vehicle sales in May are expected to fall from April's much stronger-than-expected jump to a 15.9 million annualized 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.