Motor vehicle sales slowed to a 15.0 million unit annual rate in January after an upward revision to 16.1 million units in December (previously 15.8 million units). The January pace is below the consensus of 15.7 million units in the Econoday survey of forecasters. The upward revision for December could suggest that some dealers may have shifted early sales in January into their December totals to boost their numbers for the end of 2023.

Sales of domestically produced motor vehicles fell to 11.6 million units in January after 12.6 million units in December. Domestically produced motor vehicles accounted for 77 percent of sales in January.

Sales of passenger cars fell to 3.008 million units in January after 3.194 million units in December, and similar to the 3.053 million unit pace of January 2023. Sales of light trucks which include minivans, SUVs, and crossovers were down to 11.991 million units in January after 12.922 million units in December, and a little below the 12.053 million units in January 2023. Sales of light trucks continue to dominate vehicle sales with an 80 percent share of the market.

Sales of heavy trucks typically for businesses, not household use rose to 485,000 in January after dipping to 485,000 in December, and were down from 501,000 in January 2023. Higher financing costs may be a factor in restraining sales in recent months, but if businesses need to add or replace equipment, they are doing so.

Unit vehicle sales in January are expected to edge lower to a 15.7 million annualized rate from December's 15.8 million which was better than expected and one of the best rates of the last several years.

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.