icon-branding Events Icon Created with Sketch. Inventory Icon Created with Sketch. icon-mail-hovericon-mail Marketing Icon Created with Sketch. icon-operationsicon-phone-hovericon-phone Product Training Icon Created with Sketch. Sales Icon Created with Sketch. Service Icon Created with Sketch. icon-social-fb-hovericon-social-fbicon-social-google-hovericon-social-googleicon-social-linkedin-hovericon-social-linkedinicon-social-rss-hovericon-social-rss icon-social-twitter Created with Sketch. icon-social-twitter-hovericon-social-twittericon-social-youtube-hovericon-social-youtube

Cox Automotive is closely monitoring the restoration of CDKs services, for more details/updates, click here

x

Smoke on Cars

Auto Market Weekly Summary

Share

Facebook Share Twitter Tweet Linkedin Share Email Email

Article Highlights

  1. June witnessed a deceleration in job growth, with 206,000 new jobs added — a net decline of 111,000 compared to revised estimates from prior months.
  2. The unemployment rate rose to 4.1% from 4%, pointing toward a potentially weak economic scenario that needs scrutiny to avoid a recession.
  3. New light-vehicle sales slumped 3.4% year over year in June due to disruptions from CDK's DMS outage.

Highlights

  • June witnessed a deceleration in job growth, with 206,000 new jobs added — a net decline of 111,000 compared to revised estimates from prior months.
  • The unemployment rate rose to 4.1% from 4%, pointing toward a potentially weak economic scenario that needs scrutiny to avoid a recession.
  • New light-vehicle sales slumped 3.4% year over year in June due to disruptions from CDK’s DMS outage.

Employment Overview

June saw stronger-than-expected job growth; however, a deceleration was also observed:

  • 206,000 jobs were created, exceeding the expected 190,000.
  • Notably, the private sector only created 136,000 jobs, underperforming expectations.
  • Manufacturing experienced a loss of 8,000 jobs, while services generated 117,000 new positions.
  • Education and healthcare sectors observed the largest gain in the private sector, with 82,000 jobs created.
  • Despite the slowed growth, total payrolls exceeded February 2020 numbers by 6.3 million or 4.2%.

Unemployment and Earnings

The employment situation shows mixed signals:

  • The unemployment rate rose to 4.1%, a half percentage point year-over-year rise.
  • The labor force participation rate increased marginally to 62.6%.
  • Holding steady at 7.4%, the underemployment rate was slightly above February 2020 levels.
  • Average hourly earnings growth decelerated to 0.3% month over month.

Vehicle Sales and Prices

Sales and prices of new light vehicles took a hit:

  • Sales were down 3.4% year over year in June, with a 7.6% decrease month over month by volume.
  • June’s seasonally adjusted annual rate (SAAR) was 15.3 million, down from last year and last month.
  • Fleet sales, combining large rental, commercial, and government fleets, were down 8.7% year over year.
  • The average transaction price (ATP) of a new vehicle increased to $48,644 in June, marking the highest price since December. [Kelley Blue Book will publish the June ATP report on July 10. Check back in the Newsroom.]
  • Manufacturer incentives declined by 4.4%, though they were still up 52% year over year.

Overall, while job growth was stronger than expected, the increase in unemployment rate and decline in new-vehicle sales year over year signals potential economic weakening.

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.

Sign up here to receive bi-weekly updates on news and trends dominating the automotive industry.