Total motor vehicle sales are at a slightly faster 15.9 million unit pace in May on a seasonally adjusted annual basis after 15.8 million units in April The pace is just above the 15.8 million unit consensus in the Econoday survey of forecasters. The pace of sales is somewhat faster in the first two months of the second quarter 2024 than seen in the first quarter, which should be a positive for personal consumption expenditures in the GDP numbers.

Sales of domestically produced motor vehicles are up to 12.4 million units in May from 12.0 million units in April and accounted for 78 percent of all sales. Sales of domestic vehicles add to production growth, as well as consumer spending.

Total sales of passenger cars are little changed at 3.065 million units in May after 3.039 million units in April. Sales of light trucks which includes SUVs, minivans, and crossovers are up to 12.835 million units after 12.742 million units. Light truck and continue to dominate the market with a record high of 81 percent for the past four months. Light truck sales remain strong irrespective of gasoline prices. Historically, when the price of regular gasoline started to reach $3.50 per gallon, consumers were more likely to consider buying a passenger for its greater fuel efficiency. However, that relationship no longer seems to hold. Consumers like light trucks for their functional flexibility, and manufacturers have responded with greater comfort and conveniences, improved safety features, and smaller models that are more fuel-efficient including hybrids.

Sales of heavy trucks which are part of business investment in GDP are essentially unchanged at 512,000 in May after 513,000 in April. Sales for the second quarter 2024 to-date are above the 452,000 pace at the end of the first quarter in March.

Unit vehicle sales, which have been flat, are expected to rise slightly in May to a 15.8 million annualized rate from April's 15.7 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.