U.S. Vehicle Sales (April 2022)

Thomas Feltmate, Senior Economist | 416-944-5730 

Date Published: May 4, 2022

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US vehicle sales rebound from March lows               

  • U.S. vehicle sales were up 6.6% month-on-month (m/m) in April, rising to 14.3 million (annualized) units. The reading came in below the consensus forecast of 14.5 million. 
  • Unadjusted sales volumes were 1.23 million last month or 19.2% below year-ago levels. Calculated over the 27 selling day period, this equates to a daily rate of 45,44 units compared to last year's 58,401 (calculated over 26 days). 
  • Sales of both passenger vehicles (10.7% m/m) and light-trucks (5.4% m/m) were higher in April. Light-trucks accounted for 78.3% of total monthly sales, 1.4 percentage points (pp) above its year-ago share.   

Key Implications

  • The strong uptick in April sales helps to more than offset last month's pullback and provides a solid foundation for second quarter sales to easily surpass Q1's average tally of 14.1 million. This offers a bit of upside to Q2 consumer spending, as our current forecast assumes some near-term weakening in goods expenditures as consumers shift increasingly more of their purchases back towards services. 
  • Higher inflation is helping to erode consumer purchasing power, and has already had some measurable impacts on consumer spending patterns. A recent survey conducted by Momentive showed that nearly a quarter of the respondents surveyed have already delayed buying a car over the last six-months because of higher prices. Nearly 40% of respondents have cut back on driving due to higher fuel prices. 
  • While we expect sales to continue to drift higher through the second half of the year, there are no shortage of headwinds. On going supply chain issues will continue to restrain production, which will keep the market undersupplied through this year and hold prices near current all-time highs. With incentives at record lows and interest rates expected to move significantly higher through the remainder of the year, overall affordability is likely to continue to erode, keeping sales well below what fundamentals would otherwise suggest.