Total motor vehicle sales ran at a 15.7 million unit seasonally adjusted annual rate in July, unchanged from June. The sales pace is just above the consensus of 15.6 million units in the Econoday survey of forecasters.

Total sales of domestically produced motor vehicles is at 12.5 million units in July after 12.4 million units in June. Sales of domestically produced motor vehicles account for 79 percent of all sales in July. Consumer buying of motor vehicles will add to personal consumption expenditures for third quarter GDP, especially if the current pace is maintained.

Sales of passenger cars are up to 3.144 million units in July from 3.081 million units in June. Sales of light trucks which include minivans, SUVs and crossovers is little changed at 12.592 million units in July after 12.576 million units in June. Sales of light trucks continue to dominate motor vehicle purchases with an 80 percent share of all sales.

The sales pace is holding up despite higher financing costs. Dealers are offering more attractive rates and terms than other sources of borrowing to get consumers into showrooms.

Sales of heavy trucks are up to 582,000 in July after 538,000 in June. Businesses are investing in equipment, perhaps using established lines of credit with lower rates. In any case, investment in business equipment will help support growth in the third quarter 2023.

Unit vehicle sales in July are expected to edge lower to a 15.6 million annualized rate from June's 15.7 million which compared with expectations for 15.3 million.

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.