Auto Market Weekly Summary

Key Highlights

• The auto industry continues to show resilience with strong December and Q4 momentum despite challenges in consumer confidence and purchase plans.
• The final estimate of the third-quarter real GDP showed a stronger pace of growth than the prior estimate.
• Plans to purchase a vehicle in the next six months dropped to the lowest level since June, leaving plans down year over year for the first time in four months.

Strong Q4 Momentum in Auto Market

The auto industry continues to show resilience despite challenges in consumer confidence and purchase plans.

• The new light vehicle SAAR in December increased to 16.8 million, which was the strongest reading since April 2021.
• The 4Q momentum in the vehicle market was substantial, as the 16.3 SAAR for the quarter was the best quarter since 2Q 2021.

Economic Growth and Consumer Spending

The final estimate of the third-quarter real GDP showed a stronger pace of growth at 3.1% from the 2.8% prior estimate.

• Consumer spending accelerated in the quarter and was revised up in the final estimate.
• Personal consumption was revised up to a 3.7% increase from 3.5%.
• Spending on goods remained unchanged at a 5.6% increase while spending on services was revised up to a 2.8% gain from 2.6%.

Home Sales and Mortgage Rates

All types of home sales showed growth in November, but mortgage rates had dipped a bit then. Home sales were also up year over year, as higher inventories are also creating opportunities.

• New home sales at an annualized pace of 664,000 were up 5.9% month over month and 8.7% year over year.
• Pending home sales increased 2.2% in November, exceeding expectations, and were up 5.6% year over year.
• Existing home sales were stronger than expected in November as mortgage rates declined, but rates then moved higher in December.

Labor Market Trends

We get the December employment report Friday, Jan. 10, but jobless claims are off their fall peaks. After disruptions from Hurricane Helene and Milton, the latest claims data reflect mostly declining trends across the measures, which are down from recent highs.

• Seasonally adjusted initial jobless claims declined by 9,000 to 211,000 for the week ending December 28.
• Continuing claims declined by 52,000 to 1.84 million as of December 21.
• The broadest measure of continuing claims increased by 82,000 to 1.97 million in the latest data.

Consumer Confidence

The Conference Board Consumer Confidence Index declined 7.2% in December, which was far worse than the small gain expected, but November’s index was revised higher.

• Consumers’ views of the present and future both declined, with the future view plunging 13.4% to its lowest level since July.
• Plans to purchase a vehicle in the next six months dropped to the lowest level since June, leaving plans down year over year for the first time in four months.

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.