Sales of new motor vehicles slowed in June to a 15.290 million units at a seasonally adjusted annual rate after 15.925 million units in May, and below 16.058 million units in the year ago month. The dip in June may be due to consumers responding to heavy dealer promotions around the Memorial Day weekend which was a little earlier in May this year and may have borrowed some sales activity from June.

Sales of domestically produced motor vehicles declined to 11.863 million units in June after 12.482 million units in May and are below 12.660 million units in June 2023. The share of sales of domestically produced cars and light trucks remained steady in June at 78 percent.

Sales of passenger cars declined to 2.765 million units in June after 3.062 million in May, and are lower compared to 3.137 in June 2023. The share of total sales for passenger cars is at an all-time low of 18 percent. Sales of light trucks which includes minivans, SUVs, and crossovers fell to 12.526 million units in June from 12.864 million units in May, and are a bit lower than 12.921 million units in June 2023. Buyers continue to favor vehicles in the light trucks category which has a record share of total sales at 82 percent in June.

Sales of heavy trucks rose somewhat to 496,000 in June from 495,000 in May, although below 549,000 in the year ago month. Higher financing costs and greater uncertainty about the outlook may be holding back some sales, but businesses continue to invest in equipment in an expanding economy.

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.