This edition of the Auto Market Weekly Summary includes updates on new-vehicle sales and pricing, job growth and employment trends, and consumer credit.

Bottom Line Up Front

The market found a reason for optimism last week, as hopes for a resolution to the conflict in the Middle East pushed Brent crude down toward $83 per barrel, allowing the 10-year Treasury yield to begin retreating from its recent highs. That relief was tempered by Friday’s jobs report, which showed the labor side of the economy further weaken with jobs falling in July against expectations for a fairly strong gain. While the unemployment rate declined further, workers continued to leave the labor force altogether — a continuation of the low-hire, low-fire economy we’ve been tracking. On average, the economy has added only about 30,000 jobs per month over the past year, a pace that may be uncomfortably close to the breakeven rate needed to keep unemployment steady given a shrinking labor force.

The weak jobs data pushed bond yields lower again, as investors now expect the news will delay any move toward a rate hike from Fed Chairman Warsh and the Federal Open Market Committee at the September meeting — a shift many economists had been pushing for in recent weeks. Other near-real-time data added to the cautious tone: Year-over-year consumer spending trends have now been negative for three weeks running, with gas station spending roughly the only category showing growth. In the automotive industry, dealers held firm on margin with lower incentives in July even as sales trends stayed decent and consumers leaned further into hybrid vehicles. However, the wholesale market at Manheim has cooled over the past month — part normalization, but perhaps part of a broader signal. Taken together, there are enough threads pointing to a slowing economy that the coming weeks deserve close attention.

New-Vehicle Sales

New-vehicle sales results were relatively flat from June levels, pushing a year-to-date seasonally adjusted annual rate (SAAR) to 16 million through the end of July. The July 2026 SAAR came in slightly lower than our expectations, partially driven by lower fleet sales in the month. Additionally, results from June were revised slightly higher to a 17 million SAAR, up from the 16.9 million originally reported.

  • July SAAR finished at 16.3 million, lower by 1.5% against both last year’s pace and June 2026 levels. The year-to-date SAAR level is now 16 million, lower by 0.4 million units or 2.3% against the same time last year.
  • Sales volume for July was 1.364 million units, declining by 1.8% year over year and down 0.2% against the prior month. Year-to-date, sales are lower by 2.3%. July had 26 selling days, the same as July 2025 and higher by one day against last month.
  • Fleet sales decelerated in July, showing a rise of only 1.3% year over year in July according to an analysis of Bobit data — coming off a very strong June as rental fleet sales declined 28% month over month. New sales into Commercial and Government fleets are both higher by 10% year over year in July, although both fell relative to the prior month. On a year-to-date basis, fleet sales are up 4% in total, led by an 8% gain in the commercial fleet segment, with government up almost 5%, and the rental segment higher by 1%.
  • Retail share comprised 83.5% of all sales in the month, up a tenth of a point year over year, as fleet share fell to 16.5%. 

New-Vehicle Pricing Trends

July results showed the new-vehicle market settling into a steady summer cadence, as volume held essentially flat against June while incentive spending posted its largest monthly pullback of the year. Even with the year-over-year decline in sales, OEMs eased promotional support further, a continuation of the profitability discipline seen since spring.

  • Average transaction prices (ATPs) rose to $49,855, a 0.2% gain over June’s $49,758. Against last year, ATP is up 1.9% from a lower level in July 2025. [Check back in Cox Automotive Insights on Aug. 12 for the full report.]
  • The average manufacturer’s suggested retail price rose 1.9% year-over-year to $51,621, and the average invoice is higher by 2.2% year over year to $48,557.
  • Incentive spending fell to $3,192 per unit, down 7.8% from June and 10.1% lower than a year ago — a decline of $270 per unit month over month. As a percentage of ATP, incentives fell to 6.4%, the lowest level outside of January this year.
  • Powertrain data through May 2026 (the most recent available) showed hybrid share at 21.8%, up 8.5 percentage points year over year from 13.3%. Internal combustion engine (ICE) share eased to 70.3%, battery electric vehicle (BEV) share was fairly steady at 6.7%, and plug-in electric vehicle (PHEV) share fell to 1.2% from 2% a year ago.

Jobs and Unemployment

Job growth turned negative in July, and while the overall decline was small, it was far outside of expectations going into the report. Once again, revisions to reports from both May and June further reduced the overall jobs added to the economy, showing the economy has only added about thirty thousand jobs per month over the last year. Gains were seen in health care and construction, but those were offset by larger declines in local government, accommodation and food services, as well as retail trade. In July, the unemployment rate declined again and continued to remain low as the labor force participation further contracted.

  • Nonfarm payrolls fell by 23,000 in July, well below the 80,000 gain expected. Job growth was led by health services and construction, adding about 46,000 jobs. However, the increases were more than offset by local government declining by 57,000, accommodation and food services roles down 24,000, and retail trade jobs falling 19,000.
  • Prior-month revisions lowered overall job growth by 103,000 jobs as both prior months were revised lower. May’s final reading shows 63,000 jobs added, as June was also revised down to just 20,000. The three-month rolling average of jobs created has fallen to 20,000, as job growth remains volatile and anemic.
  • The unemployment rate fell to 4.1%, after declining to 4.2% in June. The unemployment rate is lower by 20 basis points year over year.  Perhaps more meaningful, the labor force participation rate fell once again and is now down to 61.4%, a level not seen in over 50 years outside of the pandemic.
  • Average hourly earnings rose just 0.1% month over month and are higher by 3.2% year over year. Earnings growth remains lower than recent inflation trends.
Consumer Credit

Consumer credit came in essentially flat in May, reversing sharply from April’s strong gain and signaling that spending headwinds may be building as the year progresses. In recent years, lending standards for credit cards have not eased meaningfully, and slowing consumer spending growth is expected to keep pressure on this segment.

  • Total consumer credit fell $200 million in May on a seasonally adjusted basis, a deceleration from the upwardly revised $20.8 billion increase in April. The series is volatile month to month, but the May reading was the first net decline since June of last year.
  • Revolving credit contracted at an annualized rate of 4.7%, reversing from 10.9% growth in April.
  • Nonrevolving credit grew at an annualized rate of 1.6%, down from 3% in April. The gain was driven by auto loans, while outstanding student loans declined.
  • Looking ahead, nonrevolving credit faces continued headwinds from tariff passthrough, while changes to federal student loan policy under recently passed legislation add additional downward pressure on that segment.