Auto Market Weekly Summary

Key Highlights

• The labor market is stable and strong at what is considered full employment.
• The new vehicle SAAR declined in January, but sales remained higher year over year.
• The used market saw gains in January, and wholesale used prices increased.

Employment Trends

The unemployment rate declined, and wage growth accelerated. The labor market is stable and strong at what is considered full employment. Job growth slowed in January, but the prior two months saw substantial upward revisions.

• The headline unemployment rate in January declined to 4.0% from 4.1%, while earnings growth was steady and stronger than expected at an increase of 4.1% year over year.
• 143,000 jobs were created when 175,000 were expected, but the prior two months were revised up for a net increase of 100,000 more jobs than originally estimated.
• The private sector added 111,000 jobs, while the government added 32,000.
• Manufacturing added 3,000 jobs following a decline of 12,000 in December.
• Services produced 111,000 new jobs, with education and health care leading the private sector with 61,000 jobs created.
• Employment at auto dealers increased by 2,300 jobs, leaving employment down 16,400 or 1.2% below the February 2020 level.

New-Vehicle Sales and Prices

The new vehicle seasonally adjusted annual rate (SAAR) declined in January, but sales remained higher year over year. The strength of the market remained in retail as fleet sales were down year over year. New-vehicle prices declined, but incentives also declined.

• By volume, new-vehicle sales were down 25.7% month over month, but December was very strong.
• The January SAAR declined to 15.6 million, up 3.8% from last year but down 7.5% from December.
• Sales into large rental, commercial, and government fleets were down 0.9% year over year.
• The average transaction price (ATP) of a new vehicle in January declined 2.2% from December, with an initial estimate of $48,641. [Check back in the Newsroom on Feb. 11 for more details in Kelley Blue Book’s ATP report.]
• The average incentive from manufacturers declined 12.0% month over month to $3,486, which was up 29.2% year over year.

Used-Vehicle Market

The used market saw gains in January, and wholesale used prices increased.

• Used retail sales volumes increased 6.2% in January compared to December, with volumes up 15% year over year.
• Certified pre-owned (CPO) sales declined 7% month over month but were unchanged year over year.
• Wholesale vehicle values increased 0.4% in January on a seasonally adjusted basis, with the Manheim Used Vehicle Value Index rising to 205.6.

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.