Auto Market Weekly Summary

Key Highlights:

• Retail sales in March experienced the strongest monthly growth in two years, with the auto sector outperforming the rest of the retail market.
• Sales of motor vehicles and parts jumped 5.3%, driven by consumers purchasing ahead of new tariffs on imports.
• The unemployment claims data do not point to significant job losses so far in April.

Retail Sales Surge in March

Retail sales saw the strongest monthly growth in two years in March with 10 of 12 categories up, and sales were up year over year on a nominal and inflation-adjusted basis.

• The initial retail sales report for March showed a growth of 1.4%, up from 0.2% in February.
• The auto sector outperformed the rest of the retail market as sales excluding motor vehicles and parts increased 0.8%, while sales of motor vehicles and parts jumped 5.3%.
• Category-level performance was strong, with only gas stations and furniture, home furnishing, electronics, and appliance stores seeing declines.
• Retail sales were up 4.6% year over year on a nominal basis, with motor vehicles and parts (+8.8%) and health and personal care stores (+7.2%) leading the gains.
• Adjusted for inflation using the consumer price index, retail sales increased 1.5% month over month in March and were up 2.1% year over year.

Vehicle Market Leads the Charge

The vehicle market was the strongest gainer as consumers pulled demand forward to beat new tariffs on imports.

• Motor vehicles and parts saw a significant increase of 5.3% in March.
• This surge was driven by consumers looking to purchase vehicles before the implementation of new tariffs on imports.
• The strong performance in the vehicle market contributed to the overall growth in retail sales for the month.

Mixed Trends in Residential Construction

Residential construction trends were again mixed in March. Permits increased, but starts declined. The underlying data suggest some growth is likely in the months ahead, especially in multifamily.

• The seasonally adjusted annualized rate of starts decreased by 11.4%, while permits increased by 1.6%.
• Multifamily starts were up 48.8% year over year, while single-family starts were down 9.7%.
• Permits for multifamily units increased by 9.3% for the month, indicating potential growth in future months.
• The permitting pace at 1.482 million units was ahead of the 1.324 million starts pace, suggesting that starts should increase in the coming months.

Labor Market Stability

Continuing jobless claims are up slightly but down from recent peaks. The data do not point to significant job losses in April so far.

• The broadest measure of continuing claims decreased by 75,300 to 2.02 million, the lowest level yet this year.
• Seasonally adjusted initial jobless claims decreased by 9,000 to 215,000 for the week ending April 12.
• Non-seasonally adjusted initial claims increased by 3,200 but were 25,500 lower than pre-pandemic levels.
• Continuing claims increased by 41,000 to 1.89 million as of April 5, but this is still lower than the peak in March when Department of Government Efficiency (DOGE) cuts were occurring.

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.