U.S. Vehicle Sales (August 2022)

Thomas Feltmate, Director & Senior Economist | 647-983-5499

Date Published: September 2, 2022

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Vehicle sales disappoint in August, as supply chain issues linger and higher interest rates bite              

  • U.S. vehicle sales declined by 1.1% month-on-month (m/m) in August, falling to 13.2 million units. The reading came in well below the consensus forecast of a modest gain to 13.6 million.   
  • Unadjusted volumes were 1.1 million, or 3.3% above year-ago levels. The daily selling rate was 43,392 (calculated over 26 selling days), which was down 0.7% from last-August's reading of 43,706 (calculated over 25 selling days). Through the first eight months of the year, sales have totaled 9.0 million units – down 15.3% from 2021's year-to-date measure.  
  • The pullback in August sales was entirely concentrated in the light-trucks (-2.0% m/m) segment, while passenger vehicles (2.2% m/m) recorded a modest gain.  Light trucks accounted for 78.7% of last month's sales – up 2.0 percentage points from August 2021.   

Key Implications

  • The pullback in August sales was certainly a disappointment, particularly coming after two consecutive months of decent gains. If anything, the weakness last month was just another reminder of the ongoing supply challenges the automotive sector is contending with, and suggests the recovery will continue in fits and starts. 
  • Anecdotally, we are hearing that the current inventory mix heavily favors more expensive and less fuel efficient vehicles, helping to limit the buyer base. The pullback in last month's sales of light trucks seems to corroborate this idea. Until we see a further normalization in production – bringing more affordable vehicles to market – sales will continue to remain restrained.
  • From an economic growth perspective, the decline in August sales suggests a slightly smaller contribution from durables expenditures to Q3 consumer spending. Our current tracking has PCE growth at 1.4% (annualized) and GDP at 1.3%.
  • Given the ongoing supply chain challenges, amidst rising rates and elevated vehicle prices, the sales outlook for the remainder of the year remains rather bleak. While we do anticipate a modest rebound in sales activity through Q4, sales will likely only total 13.8 million in 2022 – making this year the lowest sales tally in over a decade.