Auto Market Weekly Summary

Key Highlights

• Retail sales in February showed weaker-than-expected growth, with a 0.2% increase following a 1.2% decline in January.
• The auto sector underperformed, with sales of motor vehicles and parts both down.
• Residential construction trends were mixed, with permits declining but starts jumping due to recovery from winter weather disruptions.

Retail Sales Performance

Retail sales registered weak growth in February, with seven of 12 categories down, but sales were up year over year on a nominal and inflation-adjusted basis. The initial retail sales report for February showed a 0.2% growth, which was weaker than expected, following a 1.2% decline in January.

• The auto sector underperformed, with sales of motor vehicles and parts declining by 0.4%.
• Nonstore retailers and health and personal care stores saw the largest gains, with increases of 2.4% and 1.7%, respectively.
• Food services and drinking places, as well as gas stations, experienced the largest monthly declines.

Residential Construction Trends

Residential construction trends were mixed in February as permits declined but starts jumped after the recovery from winter weather disruptions in January. The underlying data suggest some growth is likely in multifamily in the months ahead, but with mortgage rates high and permits down, single-family is not likely to see increasing starts in the short term.

• The seasonally adjusted annualized rate of starts increased by 11.2%, while permits declined by 1.2%.
• Multifamily starts increased by 10.7%, and single-family starts increased by 11.4%.
• Permits for single-family homes were down 3.4% year over year, while multifamily permits were down 13.4%.

Existing Home Sales

Existing home sales increased in February, surpassing expectations. Inventory increased, but overall supply remains tight.

• Existing home sales rose by 4.2%.
• The sales pace was the second-best in the last 12 months, with a seasonally adjusted annual rate (SAAR) of 4.26 million.
• Inventory increased by 5.1% to 1.24 million units, up 17% year over year.
• The median sales price increased to $398,400, reflecting a 3.8% year-over-year rise.

Jobless Claims

Continuing jobless claims are up slightly. We are likely to see continuing claims at higher levels this spring.

• Initial jobless claims increased by 2,000 to 223,000 for the week ending March 15.
• Non-seasonally adjusted initial claims decreased by 7,500.
• Continuing claims rose by 33,000 to 1.89 million as of March 8.

Jonathan Smoke

Chief Economist

Jonathan Smoke leads Cox Automotive’s economic and industry insights team, which tracks key metrics and trends impacting both the wholesale and retail markets for vehicles informed by the proprietary data from the company’s businesses and platforms. For 28 years, Smoke has focused on translating data and trends into relevant actionable insights for the industries that represent the biggest purchases that consumers make in their lifetimes: real estate and automotive. Smoke joined Cox Automotive in 2017.