Highlights

  1. Job growth reaccelerated in May and was stronger than expected, with the largest gain in the private sector.
  2. The overall vehicle sales market has seen positive momentum, with continued year-over-year growth in new retail vehicle sales.
  3. Used retail auto sales rose in May, with certified pre-owned sales outperforming the overall market.

Job Growth

Job growth in May reaccelerated, exceeding expectations. Here’s a quick look at the highlights:

  • In May, 272,000 jobs were created, surpassing the anticipated 180,000.
  • The private sector contributed the most to this growth, with 229,000 jobs, while government roles added 43,000.
  • Manufacturing and services added 8,000 and 204,000 new jobs, respectively.
  • The education and healthcare sectors created 86,000 jobs, albeit at a slower pace than in April.
  • Auto dealers added 1,600 jobs, leaving employment 1.0% lower than the February 2020 level.

Unemployment

Unemployment increased in the latest data, breaking a 29-month streak of being under 4.0%.

  • The headline unemployment rate increased to 4.0% from 3.9%.
  • The labor force participation rate declined to 62.5% from 62.7%. Participation is down 0.8 percentage points from before the pandemic and represents 2.1 million fewer people in the labor force compared to then despite having added 6.2 million jobs.
  • The underemployment rate, which is the broadest measure of unemployment, was steady at 7.4%, 0.4 percentage points above where it was in February 2020.
  • Monthly average hourly earnings growth accelerated to 0.4% from 0.2% in April. Earnings growth year over year increased to 4.1% from an upwardly revised 4.0% in April.

Vehicle Sales

Vehicle sales performed well in May. Here are the key figures:

  • New light-vehicle sales were up 4.8% year over year.
  • The May seasonally adjusted annual rate (SAAR) for new vehicles was 15.9 million, marking an increase of 2.5% from last year.
  • Sales into large rental, commercial, and government fleets were up 5.7% year over year.
  • The average transaction price of a new vehicle in May was an estimated $48,389, mostly unchanged from April, according to Kelley Blue Book. [Check back in the Newsroom on Tuesday, June 11, for more details.]
  • The average transaction price relative to the average manufacturer’s suggested retail price declined to 97.4%, as discounting increased to the highest level since April 2021.
  • The average incentive spend from manufacturers increased 6.2% to $3,243, which was up 67% year over year.
  • Incentives as a percentage of average transaction price increased to 6.7% from 6.3% in April, reaching the highest level since May 2021.

Used-Vehicle Market

The used-vehicle market demonstrated strong performance in May as well:

  • Sales volumes were up 6% in May compared to April and up 12% year over year, according to vAuto data.
  • Certified pre-owned (CPO) sales increased 8% month over month in May and were up 3% year over year.
  • According to the Manheim Used Vehicle Value Index, wholesale vehicle values declined 0.6% in May on a seasonally adjusted basis. The Manheim index ended May lower by 12.1% year over year.