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U.S. Vehicle Sales (May 2024)

Andrew Foran, Economist | 416-350-8927

Date Published: June 4 , 2024

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U.S. vehicle sales beat expectations in May

  • U.S. vehicle sales rose 7.6% month-on-month (m/m) to 15.9 million (annualized) units in May – surpassing consensus expectations for 15.8 million units.
  • Unadjusted sales volumes were 1.43 million units or 4.8% above year-ago levels. The average daily selling rate (DSR) was 54,963 – calculated over 26 days – 0.8% above May 2023's 54,553 daily rate calculated over 25 days.
  • Passenger vehicle sales fell 1.1% year-on-year (y/y) while sales of light-trucks increased 6.3% y/y. Light-trucks accounted for 80% of last month's sales, higher than its year-ago 76% share.   

Key Implications

  • Light vehicle sales picked up in May, likely aided in part by Memorial Day holiday incentives at the end of the month. Volumes have been supported by continued supply improvements, with the days' supply of inventory sitting at 51 in April, up from 48 the month prior. While this has enabled sales to head higher than the supply-constrained levels seen in years prior, affordability challenges remain a wedge between current volumes and the pre-pandemic average of roughly 17 million annual units.
  • Elevated financing costs combined with the cumulative increase in vehicle prices over the past few years continue to keep many potential buyers out of the new vehicle market. Vehicle incentives and solid real wage growth have helped to grease the wheels. However, with the Federal Reserve expected to maintain its policy stance through the next quarter, sales growth is likely to remain moderate over the coming months.       

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