Total motor vehicle sales are up to 15.8 million units at a seasonally adjusted annual rate in December after an unrevised 15.3 million units in November. Total sales are well above the 13.550 million units in December 2022. The December pace is above the consensus of 15.4 million units in the Econoday survey of forecasters. Total sales of domestically produced motor vehicles are up to 12.3 million units in December after 11.9 million units in November. Sales of domestically produced motor vehicles accounted for 78 percent of all sales.

Sales of passenger cars are up to 3.069 million units in December from 3.004 million units in November. Light truck sales which include minivans, SUVs, and crossovers are up to 12.760 million units after 12.340 million units in November. Light trucks accounted for 81 percent of all motor vehicles sales.

Consumers do not appear to be deterred by higher financing costs to which dealers have responded with deals and incentives to compensate. Sales of motor vehicles are ending 2023 on a strong note that should support personal consumption expenditures in the fourth quarter GDP numbers when the advance report is released at 8:30 ET on Thursday, January 25.

Affecting GDP business investment will be sales of heavy truck which are slower at 450,000 vehicles in December after 478,000 in November and weaker compared to 498,000 in December 2022. Many businesses purchased equipment earlier in 2023 in expectation of higher financing costs in the near future and sales of heavy trucks will be less positive in the fourth quarter.

Unit vehicle sales in December are expected to edge up to a 15.4 million annual rate from November's 15.3 million which was held down by lack of inventory tied to the now settled industry strike.

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.