Sales of new motor vehicles are down to a 15.6 million unit seasonally adjusted annual rate in January after 16.0 million in December. The January pace is below the consensus of 16.2 million in the Econoday survey of forecasters. Sales of domestically produced motor vehicles are at 11.8 million units in January after 12.8 million units in December. January 2025 is off to a slower start after a pickup in sales in the final months of 2025. The devastating hurricanes in a late September and early October increased demand to replace lost vehicles which now seems complete. Some buying was moved forward as consumers anticipated increased prices in the coming year with possible supply shortages related to higher tariffs and is likely finished as well.

Sales of passenger cars ease to a 2.771 million unit pace in January after 3.039 million in December. Sales of light trucks which include SUVs, minivans, and crossovers decrease to a pace of 12.832 million units in January from 13.830 million units in December. If sales are down somewhat in January, light trucks maintain their popularity relative to passenger cars with an 82 percent share of total sales which continues to be a record high.

Sales of heavy trucks are mostly to businesses. In January, sales are up to a 534,000 unit pace after easing to 454,000 in December. The pace is the fastest since 535,000 in August 2023. It is not clear if businesses are investing in equipment in anticipation of increased activity, or purchasing ahead of possible tariffs to ensure needed infrastructure is in place before prices go up and supply declines.

While consumers may be more sensitive to financing costs at the moment and better able to decide to defer buying motor vehicles, businesses will be reluctant to lose out without the right equipment to get jobs done.

Sales are seen down slightly at 16.2 million versus 16.8 million in December.

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.