This early September edition of the Auto Market Weekly Summary provides updates on important trends across the economy and automotive market, including new-vehicle sales, pricing and U.S. employment. Gas prices also rose last week, reaching $4.15 per gallon, while diesel climbed toward $5.60, levels not seen since early April. The acceleration in diesel prices is driving real risk of further inflation because fuel is a significant expense for carriers across a broad array of goods. It is also another signal that could keep interest rates elevated.

Bottom Line Up Front

August’s jobs report delivered a genuine surprise: Nonfarm payrolls rose 162,000, nearly three times the expected 55,000, while prior-month revisions turned positive for the first time in months. The unemployment rate held steady at 4.1%, and labor force participation increased for the first time since January. The strong report reignited concerns about a rate increase ahead of the September Federal Open Market Committee meeting, with Fed funds futures assigning a 60% probability to an increase, up from the previous week. Federal Reserve Governor Christopher Waller’s comments on Thursday, Sept. 3,  suggested he would support holding rates steady if inflation continued to improve, but Friday’s jobs data erased that signal. The market has also pulled back from pricing in two rate hikes by December to just one.

For the automotive market, the macroeconomic tension contrasts with a steadier transactional picture. Cox Automotive’s real-time data showed stronger new- and used-vehicle sales in August, producing a seasonally adjusted annual rate (SAAR) of 16.8 million. The result was aided by favorable seasonal adjustment compared with last year’s elevated base. Inventory remains in check, and pricing reflected steady demand: Average transaction prices topped $50,000 for the first time this year, and incentives fell for a third consecutive month.

Risk is building, however quietly. The 10-year Treasury yield has climbed back toward 4.80%, and lenders will eventually need to pass higher funding costs on to consumers. Diesel prices are nearing $5.60 per gallon, a level not seen since early April, adding inflation risk as carriers pass fuel costs through the supply chain. If that pressure filters into broader goods prices, the path to lower inflation becomes more difficult, and the Fed’s resolve on interest rates could strengthen. Steady sales and lean inventory remain supportive heading into fall, but the market’s resilience may soon face a more direct test.

New-Vehicle Sales and Pricing

New-vehicle sales increased from July but were lower than the strong results of August 2025, which had one more selling day. However, the SAAR was strong for the month, aided by less challenging seasonal adjustment factors because of last year’s strength. Strong foreign light-truck sales helped drive the better-than-expected new-vehicle SAAR.

  • The August SAAR finished at 16.8 million, up 1.6% from a year earlier and 2.7% from July’s pace of 16.3 million. The year-to-date SAAR is 16.1 million, down 0.3 million units, or 1.6%, from the same period last year.
  • August sales volume was 1.381 million units, down 5.8% year over year but up 1.3% from July. Year to date, sales are down 2.7%. August had 26 selling days, one fewer than August 2025 and the same number as July.
  • Fleet sales were essentially flat from August 2025 and are up 3.6% year to date. Commercial fleet sales rose 2.7% from 2025 levels. However, that strength was offset by a 0.8% decline in rental fleet sales and a 5.3% decline in government fleet sales from August 2025. Fleet share was estimated at 15.5%, up from 15% last year, as the overall decline in monthly sales increased the fleet share.
  • Retail sales accounted for 84.5% of all sales in August, down 0.5 percentage points year over year. The retail share declined because retail sales fell while fleet sales remained steady.
New-Vehicle Pricing Trends

New-vehicle pricing increased in August, with the average industry price rising above $50,000 for the first time since December. As inventory growth has moderated in the new-vehicle market and remains relatively constrained in many areas, pricing conditions continue to favor dealers, who are in a position to hold prices.

  • Average transaction prices (ATP) rose back above $50,000, up from July and a year earlier. [Check back on Sept. 10 for the full Kelley Blue Book average ATP report.]
  • Incentive spending fell for a third consecutive month as demand remained solid. Spending declined to $3,264 per unit, down 0.6% from July and 7.3% from a year earlier. Incentives equaled 6.5% of the average transaction price, down 0.6 percentage points from August 2025.
  • Even though dealers note affordability challenges in the Q3 Cox Automotive Dealer Sentiment Index, the price pressure index declined in the third quarter, down from Q2 and equal to year-ago levels. The decline suggests fewer dealers feel pressure to lower vehicle prices, even as shoppers become more selective.
Jobs and Unemployment

Job growth was much stronger than anticipated in August, reversing the decline reported in July. Revisions to June and July were also positive, reversing a string of negative revisions in recent months. August’s gains were led by food services and drinking places, which posted the largest increase in the segment since January 2023. Local government employment also increased, largely reversing July’s decline. The unemployment rate was unchanged in August, while the labor force participation rate increased for the first time in several months.

  • Nonfarm payrolls increased by 162,000 in August, well above the expected gain of 55,000. Food services and drinking places led job growth, adding 59,000 positions, the segment’s largest increase in more than three years. Local government education added nearly 42,000 jobs, mostly offsetting July’s loss of 57,000. The gains were partially offset by declines in publishing industries, excluding internet publishing, and continued job losses in finance and insurance, driven by insurance carriers.
  • Revisions to the prior two months increased overall job growth by 55,000, with both months revised higher. June’s final reading showed a gain of 31,000 jobs, while July was revised to a gain of 21,000 after initially showing a loss of 23,000. The three-month rolling average is 71,000 jobs created, but it remains volatile because of monthly revisions and overall softer hiring trends in recent months.
  • The unemployment rate remained steady at 4.1%, down 20 basis points year over year. Labor force participation increased for the first time since January, rising to 61.6%, driven by gains among people ages 20 to 24. Participation also increased in the 55-and-older cohort, a group that has seen elevated retirement-driven exits in recent years, making August’s increase a notable reversal.
  • Average hourly earnings rose 0.3% from July and 3.1% from a year earlier. Earnings growth remains below recent inflation trends.