Motor vehicle sales total 16.798 million units at a seasonally adjusted annual rate in December up from 16.649 million units in November and above 15.919 million units in December 2023. The December level is above the consensus of 16.5 million units in the Econoday survey of forecasters. Consumers responded to manufacturer buying incentives and perhaps also anticipated higher prices in the coming year. Sales of domestically produced motor vehicles are slightly higher at 12.872 million units after 12.796 million units in November and above 12.367 million units in December 2023. Domestically produced motor vehicles account for 77 percent of total motor vehicle sales.

Total sales for passenger cars are essentially unchanged in December at 2.979 million units after 2.975 million units in November and are below 3.161 million units in December 2023. Sales of light trucks which include minivans, SUVs, and crossovers are up to 13.820 million units from 13.673 million units in the prior month and 12.759 million units in the year-ago month. Sales of light trucks account for 82 percent of all sales, matching the record high of June and November 2024.

Sales of heavy trucks are down to 422,000 in December from 491,000 in November and 466,000 a year ago. It is the lowest since 419,000 in August 2021. It would appear that businesses sped up their investment in trucks in November and demand is now exhausted. With hopes for lower rates pushed back some months, businesses will be more cautious about borrowing for the time being and perhaps have less need to do so after investing in equipment earlier in 2024.

Sales are expected at a 16.5 million unit rate in December, flat from November.

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.