Sales of motor vehicles are up to a 16.038 million units seasonally adjusted annual pace in October after 15.768 million units in September. The pace is above the consensus of 15.800 million units for October in the Econoday survey of forecasters. Domestically produced unit sales are up to 12.380 million units in October after 12.183 million units in September. The uptick in sales likely got a boost from replacement of motor vehicles destroyed in floods associated with Hurricanes Helene and Milton. In turn, available inventories of vehicles for sales will be reduced and demand for new production should be higher.

Sales of passenger cars are up to 3.050 million units in October from 2.984 million units. Sales of light trucks which includes minivans, SUVs, and crossover are up to 12.987 million units from 12.785 million units. Light trucks accounted for 81 percent of all units sold, similar to the trend since February.

Sales of heavy trucks mainly to businesses moderates to 390,000 units in October from 476,000 in September. Businesses affected by the hurricanes may have yet to reopen and/or have to wait for insurance payouts before replacing equipment. If businesses are forced to shut down completely, there will be no new purchases of equipment.

Forecasters see vehicle sales essentially flat at a 15.7 million unit rate in October versus 15.8 million in September.

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.