The midterm elections brought sweeping change last week, and I had a front-row seat to the reaction at a national economics conference as the results came in. In this issue of the Auto Market Weekly Summary, we break down what it could mean for the economy and the auto market, along with updates on October new-vehicle sales, commercial vehicles and freight, and the October jobs report.

Bottom Line Up Front

The midterm elections brought a blue tsunami the likes of which the United States hasn’t seen in decades, and with it, the likelihood of significant policy changes ahead. It will take time to discern exactly how it all plays out, with impacts on economic growth reverberating for the next several years. But some early direction is clear. The results will almost assuredly put more emphasis on improving the relationships with both Canada and Mexico, which could create better opportunities for vehicle production and lessen the effects of tariffs, all of which would be welcomed by consumers. We also expect a more positive environment for clean and renewable energy, which in turn could spark more interest in electric vehicles.

At the same time, the macro data continues to support the Fed’s tightening bias. October payrolls rose 165,000, well above expectations, and positive revisions to both August and September lifted the three-month average much higher. Productivity also came in stronger than anticipated, and some economists believe recent growth is understated because the AI boom isn’t fully captured in measured economic activity. If that’s true, then together with inflation running near 4% and a firmer job market, the Fed will likely resume raising rates to tame inflation. With the midterms in the rearview mirror, that path is now easier.

The macro view is perhaps the most important driver as we think about the auto sector in the coming months. Over the last several years, corporate profits have hit all-time highs, powering the stock market ever higher and supporting a strong wealth effect on consumer spending: a trend that has had an outsized impact on new-vehicle sales. With Democrats now in charge of both the House and the Senate, and an election that served as a referendum on affordability, I would expect them to work to help consumers take back some share of those profits. The economics of firms comes down to how capital and labor are allocated, and policy that tilts that balance toward individuals could slow corporate earnings growth, and with it, the wealth effect that has done so much of the heavy lifting, while potentially boosting labor earnings.

For the auto market, the crosscurrents are plentiful. Oil prices fell sharply last week on hopes of resolving the conflict in the Middle East, and gas prices have started to come down, now at $4.07 per gallon nationwide. Consumer preferences move on a long time horizon, so expect lower gas prices to help reignite some of Americans’ love for full-size trucks and large SUVs. October’s new-vehicle SAAR, or seasonally adjusted annual rate of sales, fell to 15.5 million, one of the weakest readings of the year, while volume rose about 3%, helped by an extra selling day. Meanwhile, average transaction prices (ATPs) hit a record, topping $51,000 for the first time and up 2.1% year over year. [Check back for the full Kelley Blue Book ATP report.] With ATPs usually peaking for the year in December, that inflationary trend is likely to persist. In the near term, I expect consumer sentiment to rise on hopes of a deal to end the war in the Middle East, right in time for holiday spending. Let’s watch how spending patterns move through year-end, with an eye toward the policy changes that will play out over the next couple of years.

New-Vehicle Sales

October new-vehicle sales came in well below expectations, as a pullback among retail buyers offset another solid month for fleet. Softer tech-led equity markets, affordability and election uncertainty may have kept some shoppers on the sidelines, though the year-to-date pace remains on track for a full-year finish near 16 million.

  • The October SAAR finished at 15.5 million, below our 16.1 million forecast, down 0.9% from 15.7 million a year ago and below September’s 16 million pace. The year-to-date SAAR stands at 16 million, 1.9% below the same point last year.
  • Sales volume reached 1.32 million units, up 2.9% year over year but roughly 50,000 units short of our forecast. October had 28 selling days, one more than last year. Year-to-date, volume is lower by 1.5%.
  • Fleet sales rose 5.7% year over year, per Cox Automotive’s analysis of Bobit data, led by a 16.9% gain in commercial fleet sales, while rental rose 2.2% and government fell 8.9%.
  • Retail sales edged up just 0.6% year over year, pulling retail share down to 81.5% from 83.2%, and the retail SAAR slowed to 12.6 million from 13.1 million a year ago.
Commercial Vehicles and Freight

Heavy-truck orders cooled in October as fleets waited for clarity on federal emissions rules, while freight volumes remain modest even as retailers stocked up ahead of the holidays. Tighter capacity, firmer freight rates, and elevated diesel prices are pushing shipping costs sharply higher.

  • North American Class 8 preliminary net orders fell 24% month over month and 36% year over year in October, as uncertainty over proposed amendments to the EPA’s 2027 NOx rule slowed the start of the model-year 2027 order season. Year-to-date orders remain 74% higher than last year.
  • The October Logistics Managers’ Index reached its second-highest reading in four years, behind only June, as retailers built inventories ahead of the holidays and inventory growth hit its fastest pace since September 2022.
  • Third-quarter shipments in the U.S. Bank Freight Payment Index rose 0.4% quarter over quarter and 0.5% year over year, while shipper spending jumped 32.1% year over year, the strongest annual gain since 2021, on tighter capacity, higher rates, and fuel surcharges.
  • The national average diesel price was $6.29 per gallon as of Nov. 2, up about $2.54 from a year ago, and fuel ranked as trucking’s top concern in the American Transportation Research Institute’s 2026 industry survey.
Jobs and Unemployment

The labor market regained momentum in October, with payroll growth well above expectations and upward revisions showing the late-summer slowdown was milder than first reported. The household survey was also firmer, as the labor force grew and the unemployment rate edged back down, though wage growth continues to run below inflation.

  • Nonfarm payrolls rose by 165,000 in October, well above expectations and far above the 48,000 average monthly gain over the prior 12 months.
  • August and September were revised up by a combined 84,000 jobs, lifting the three-month average to 137,000 from 51,000 in the prior report.
  • Professional and business services added 70,000 jobs and health care added 55,100, while transportation and warehousing added 24,800 and manufacturing added 19,000.
  • The unemployment rate dipped to 4.1% from 4.2% as the labor force grew by 421,000, lifting the participation rate to 61.9%, the highest since March.
  • Average hourly earnings rose 0.4% month over month and 3.1% year over year.