Smoke on Cars
Auto Market Weekly Summary
Monday October 7, 2024
Key Highlights
- September’s job growth significantly surpassed expectations, with 254,000 jobs created compared to an expected 150,000, marking the highest surge since March.
- Despite the robust job creation, the automotive industry exhibited slower growth, with auto dealers adding only 1,300 jobs, leaving overall dealership employment 0.7% lower than February 2020 levels.
- September also saw new light-vehicle sales drop by 12.8% year over year, recovering slightly to a seasonally adjusted annual rate (SAAR) of 15.8 million, up from the previous year’s 15.7 million figure and August’s 15.3 million.
Job Growth Surges in September
September registered a stronger-than-expected uptick in job growth, with a total of 254,000 jobs created, outpacing the anticipated 150,000.
- The private sector contributed the lion’s share, adding 223,000 jobs, marking the highest growth since March.
- The manufacturing sector lost 7,000 jobs, following a decline of 27,000 in August.
- The automotive sector saw a modest rise, with 1,300 jobs added at auto dealerships. However, dealership employment remains down by 8,800 (or 0.7%) compared to February 2020.
Unemployment Rate and Labor Market Evolution
While the headline unemployment rate saw a slight decline, overall market indicators and the deterioration in the labor market suggest a potential recession on the horizon as per the Sahm rule.
- The unemployment rate declined slightly to 4.1% from 4.2% yet increased by 0.5 percentage points year over year.
- The labor force participation rate remained steady at 62.7% but is still down by 0.6 percentage points since the pre-pandemic period. Despite adding 6.8 million jobs, there are 1.6 million fewer people in the labor force.
- The underemployment rate, a significant measure of unemployment, declined to 7.7%, slightly higher than the February 2020 mark.
New-Vehicle Sales Experience a Dip
Despite a slight recovery in the SAAR, new light-vehicle sales in September witnessed a 12.8% year-over-year decline, with new vehicle sales volume down by 17.9% month over month. A key driver of the volume decline was fewer selling days.
- The September SAAR recovered to 15.8 million, marking a 0.5% rise from last year and a 3.3% increase from August’s revised 15.3 million.
- Fleet sales saw a 6.4% year-over-year decrease in August, with large rental fleet sales experiencing a 1.5% rise, but commercial and government fleet sales down 11.7% and 12.3%, respectively.
- Estimated retail sales were down 12.2% from last year, leading to an estimated retail SAAR of 12.4 million, a decrease from both last year’s 13.3 million and last month’s 12.7 million pace.
Jonathan Smoke
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.