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Auto sales decline as affordability issues persist
Total vehicle sales declined in February, falling from 16.4 million annualized units in January to 15.3 million units and monthly sales levels rising 11.8 percent year-over-year. NAFCU Economist Noah Yosif analyzes the data in a new Macro Data Flash report.
“In conjunction with rising vehicle prices, these datapoints suggest affordability remains the greatest challenge for retailers heading into the spring selling season, as rising interest rates, elevated commodity prices, as well as soaring labor costs permeate final price tags and hamper demand,” said Yosif.
Car sales fell to 3 million annualized units last month along with light trucks sales decreasing from 12.7 million annualized units in January to 11.9 annualized units. Domestic production continued to decline 3 percent in January; inventory rose to 0.58 months of sales.
“The persistence of these affordability issues within the new vehicle market could precipitate increased migration towards the used vehicle market, creating newfound stress on recovering inventories while bolstering prices as well,” concluded Yosif.
For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU's Macro Data Flash reports.