Sales of new motor vehicles at a seasonally adjusted annual rate continue to slow in June as the front-loading of purchases in March and April exhausted future demand. The rush to get ahead of price increases related to tariffs is now over. With tariff policy still unsettled, imports of new units could be delayed until the actual impact of higher tariffs is known. Domestic vehicle manufacturers will be cautious as prices for imported parts like semiconductors are likely to go higher and supply chains could be interrupted.

Sales of new motor vehicles are down to a 15.3 million unit pace in June from 15.6 million units in May, and substantially lower than the 17.8 million units in March and 17.3 million units in April. June sales are below the consensus of 15.5 million units in the Econoday survey of forecasters. Sales of domestically produced vehicles are down slightly to 12.0 million units after 12.1 million in May. Domestically produced vehicles account for 78 percent of all sales.

Sales of passenger cars are about unchanged at 2.538 million in June from 2.596 million in in May. Sales of light trucks which include minivans, SUVs, and crossovers are down to 12.804 million units after 13.006 million in the prior month. Sales of light trucks continue to dominate with a record high 83 percent share of all sales, and have for three months now.

Consumer spending on motor vehicles will not add to the durables component for overall personal consumption expenditures in second quarter GDP compared to the first quarter. Business investment in equipment will also feel the impact of slower buying with heavy truck sales at 435,000 in June, falling from 457,000 in April and 450,000 in May.

Sales are seen fading to a 15.5 million rate in June from 15.6 in May and 17.3 million in April as consumer spending fizzled in Q2.

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.