U.S. Vehicle Sales (October 2024)

U.S. vehicle sales hit six-month high in October

• U.S. vehicle sales rose 1.7% month-on-month (m/m) to 16.0 million (annualized) units in October – well above consensus expectations for 15.6 million units.
• Unadjusted sales volumes were 1.33 million units or 10.6% above year-ago levels. The average daily selling rate (DSR) was 49,084 – calculated over 27 days – 2.4% above October 2023's 47,926 daily rate calculated over 25 days.
• Passenger vehicle sales rose 5.7% year-on-year (y/y) while sales of light-trucks increased by 11.8% y/y. Light-trucks accounted for 81% of last month's sales, slightly higher than its year-ago 80% share.   

Key Implications

• Light vehicle sales rose more than expected in October, as stronger growth in the retail segment offset disruptions related to extreme weather in the Southeast. Sales through most of the year have languished under the weight of high financing costs, but the half-point cut by the Federal Reserve in September likely provided modest support to October's volumes. This may however be a short-lived boost, as interest rates trended back towards a three-month high by month-end.
• Uncertainty related to tomorrow's election has drawn the attention of financial markets away from the projected interest rate path of the Federal Reserve over the near-term. This has led to higher rates which will likely restrain vehicles sales through the end of the year. Once the results of the election are known, interest rates should return to downward trend in line with the path of fed funds rate and continue to support sales moving into 2025.       

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