Auto Market Weekly Summary

Key Highlights

• The employment report for February included mixed trends but generally reflected stable conditions.
• New light-vehicle sales were down 0.7% year over year in February with one fewer selling day.
• The used-vehicle market saw gains in February, but wholesale used prices declined on a seasonally adjusted basis.

Employment Trends

Job growth accelerated in February and came in close to expectations, but the unemployment rate increased, and wage growth decelerated.

• 151,000 jobs were created in February, slightly below the expected 160,000.
• The private sector added 140,000 jobs, while government added 11,000.
• Manufacturing added 10,000 jobs following a decline of 5,000 in January.
• The headline unemployment rate increased to 4.1% from 4.0%.
• The labor force participation rate declined to 62.4% from 62.6%.
• Monthly average hourly earnings growth decelerated to 0.3% from an upwardly revised 0.4%, but the monthly change came in as expected.

New-Vehicle Sales and Prices

The new-vehicle sales pace, or seasonally adjusted annual rate (SAAR), increased in February, but sales were slightly lower year over year with one fewer selling day. The strength of the market remained in retail as fleet sales were down more significantly year over year. New-vehicle prices declined, but incentives declined too. [Check back this week in the Newsroom for the Kelley Blue Book average transaction price report.]

• New light-vehicle sales were down 0.7% year over year in February with one fewer selling day.
• By volume, new-vehicle sales were up 10.6% month over month.
• The February SAAR increased 3.2% to 16.0 million, up from January’s 15.5 million.
• Combined sales into large rental, commercial, and government fleets were down 12.3% year over year.
• Retail sales were estimated to be up 3.9% from last year, leading to an estimated retail SAAR of 12.8 million.
• The average transaction price of a new vehicle in February declined 1.3% from January to $48,039, which was up 1.0% year over year.
• The average incentive from manufacturers declined 1.7% month over month to $3,392, which was up 19.9% year over year.

Used-Vehicle Market

The used-vehicle market saw gains in February, but wholesale used prices declined on a seasonally adjusted basis. Tax refund season just started kicking into gear at the end of February.

• Used retail sales estimates indicate that volumes increased 8% in February compared to January and were also up 8% year over year.
• Certified pre-owned (CPO) sales were unchanged month over month but were down 4% year over year.
• Wholesale vehicle values declined 0.7% in February on a seasonally adjusted basis, as the Manheim Used Vehicle Value Index declined to 204.1.
• The unadjusted price change in February was an increase of 1.4%, leaving the unadjusted average price up 0.8% year over year.
• Tax refunds are ahead of last year, with $124.8 billion issued as of Feb. 28, up 8% year over year. The average refund thus far is $3,382, up 6% year over year.

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.