Auto Market Weekly Summary

Key Highlights

• Employment at auto dealers increased by 3,800 jobs, leaving employment down 13,500 or 1.0% below the February 2020 level.
• New light-vehicle sales were up 10.7% year over year in March, driven by retail sales and urgency to get ahead of pending tariff-driven price hikes.
• The average transaction price of a new vehicle in March declined 0.4% from February, with an initial estimate of $47,448.

The worry is not about the data released last week but about the tariff policies that have started a global trade war.

Employment Trends

Job growth accelerated in March and exceeded expectations, but prior job numbers were revised down, the unemployment rate increased, and wage growth decelerated. With tariffs destined to drive inflation higher in the short term, the strength of the economy supported by consumer resiliency would be challenged by the potential for declining real wages if the labor market weakens more.

• The headline unemployment rate increased to 4.2% from 4.1%.
• The labor force participation rate increased to 62.5% from 62.4%.
• Monthly average hourly earnings growth accelerated to 0.3% from a downwardly revised 0.2%.
• Earnings growth year over year decelerated to 3.8% and was weaker than expected.
• 228,000 jobs were created when 140,000 were expected, but the prior two months were revised down, resulting in a net decrease of 48,000 fewer jobs than originally estimated.
• The private sector added 209,000 jobs, while government added 19,000.
• Manufacturing added 13,000 jobs following an increase of 14,000 in February.
• Services produced 197,000 new jobs, more than doubling the February increase.
• Employment at auto dealers increased by 3,800 jobs, leaving employment down 13,500 or 1.0% below the February 2020 level.

New-Vehicle Sales

The new vehicle seasonally adjusted annual rate (SAAR) jumped in March to the highest in four years as buyers moved to get ahead of pending tariffs. March’s strength was driven by retail, as the month saw another month of weak gains in sales into fleet.

• Sales were up 10.7% year over year in March with one fewer selling day compared to March 2024.
• By volume, new-vehicle sales jumped 29.9% month over month with two more selling days compared to February.
• The March SAAR increased 11.0% to 17.7 million, up 13.3% from last year’s 15.7 million and up from February’s 16.0 million.
• The new vehicle SAAR jumped in March to the highest in 4 years as buyers moved to get ahead of pending tariffs. The strength of the surge was in retail. This was before new tariffs were implemented on all imports, and we saw new vehicle prices decline, but incentives declined slightly.
• Combined sales into large rental, commercial, and government fleets were up 2.3% year over year. Sales into large rental fleets were up 13.1% year over year, while sales into commercial fleets were down 9.0%, and sales into government fleets were down 15.2%.

Average Transaction Price

Even with the surge in demand to get ahead of tariffs, the average transaction price (ATP) of new vehicles saw a slight decline in March. [Check back for the full ATP report later this week.]

• The average transaction price declined 0.4% from February, with an initial estimate of $47,448.
• The average price relative to average MSRP was steady at 96.0%, indicating no change in discounting.
• The average MSRP declined 0.4% month over month but was up 1.1% year over year.
• The average incentive from manufacturers declined 0.4% month over month to $3,319, up 4.6% year over year.

Used-Vehicle Sales

Used retail sales estimates based on vAuto data indicate positive trends.

• Volumes increased 19.4% in March compared to February, with volumes up 8% year over year.
• Certified pre-owned (CPO) sales jumped 21% month over month and were up 6% year over year.