Despite reports of SUVs piling up on dealer lots, the Census Bureau’s Advance Monthly Retail Sales report shows autos are leading the way.
Key Spending Items
- Motor vehicles and parts sales rose a whopping 1.8% in August for an overall retail sales gain of 0.4%
- Motor vehicles and parts dealers were up 6.8 percent from last year.
- Excluding Autos, sales were flat.
- Total sales for the June 2019 through August 2019 period were up 3.7 percent from the same period a year ago. The June 2019 to July 2019 percent change was revised from up 0.7 percent to up 0.8 percent.
- Retail trade sales were up 0.6 percent from June 2019, and 4.6 percent above last year.
- General merchandise sales fell 0.3% for the month but rose 1.% from a year ago.
- Department stores continue to struggle. Sales fell 1.1% for the month and are down 5.4% from a year ago.
- Nonstore retailers were up 1.6% for the month and 16.0 percent from year ago.
These strong auto numbers conflict with reported flatline sales from the manufacturers and reports of SUVs (not just sedans) piling up on dealer lots.
Something seems amiss.
Revisions coming?
Mike “Mish” Shedlock
Motor vehicles and parts dealers were up 6.8 percent from last year.
Total sales for the June 2019 through August 2019 period were up 3.7 percent from the same period a year ago
Retail trade sales were up 4.6 percent above last year.
General merchandise sales fell 0.3% for the month but rose 1.% from a year ago.
Department stores continue to struggle. Sales fell 1.1% for the month and are down 5.4% from a year ago.
Nonstore retailers were up16.0 percent from year ago.
Looking at the results over the last year and not just last month gives a somewhat different perspective. Mish, do these results correspond with your view of the effects of “the trade war”?
The excluding autos, sales were flat, reminds me of the inflation numbers we see.
Excluding the items that went up, there is no inflation!
What would the number be if we excluded the items that went down?
Calendar effect … writ LARGE
August had
5 Fridays – payday
5 Saturdays – when many large durable good purchases made
August 31 first day of Labor Day sales event.
Interest rates going down and prices going up.
I’m really curious what the percentages are for both financed purchases and cash purchases. In my world, you don’t ‘own’ anything (car, house, your Rolex) unless it’s paid for in cash.
How are used car sales counted in this retail sales report?
A lot of people are buying off lease vehicles from dealerships (because that way they come with inspections and more importantly extended warranties).
If used car sales are included, then the number makes sense. I suspect used car sales might be up 3%, while new cars negative, and it nets to 1.8%
Used car prices are ridiculous and above whatever Edmunds or Kelly Blue book says the value should be. At one time you could buy a decent used car for around $10,000, now even 10 year old Toyota Corollas with over 60,000 miles are listed at $10,995 (plus the 8.875% sales tax & insurance cost I mentioned here). Seems to me that everyone is either buying on 72 month loans (with no money down) or mommy & daddy is buying a new car for their ‘off to college’ child (even Herb Chambers opened several dealerships in Boston right near Boston University)
UAW leadership has been arrested for spending union dues on $450 bottles of champagne and ladies in very little clothing… entertainment for union leaders. UAW members are threatening to strike at GM. Corporate leadership of Government Motors were installed during Obama’s cash for clunkers taxpayer shakedown, so every reason to think they are as crooked as UAW leaders.
Car dealerships seem to be making an extra push this year to clear out this year’s model inventory. Lots of sales and markdowns.
In the UK, Pendragon, one of the largest car dealers, has just hit 11p a share and gives you a dividend yield of 15% or if you’re feeling lucky try Countrywide PLC UK’s largest real estate agent with the shares at 5p (they used to be 600p). I think Mr Market has made his mind up where the car and property markets are going.
I bought my son a new car in August. Lots of incentives trying to clear out 2019 models. I think I paid over $8 under sticker cost. Not sustainable.
The way sticker prices of cars have been going up recently, I’d suggest it is anything more than 8% under sticker which is not sustainable…..
car sales are white hot for most models and dealers are easily selling at full MSRP + Options + DMV fees plus sales tax (6.25% or 8.875% of the purchase price) all “rolled’ into a 72 month loan (before insurance). Remember insurance is another $90 – $200 a month in addition to the car payment
The most popular car in the US, is the F150. If you’re buying that one for full retail, I don’t know what to tell you….
It’s the same story across other big categories, like family sedans. All sedans, really. Even the Prius is discounted now.
Crossovers were hot for awhile, but a massive production ramp has rendered those a tougher sale as well.
But, even if you were somehow right: Noone doubts car sales can be stimulated for awhile by The Fed handing enough subsidies to banks to ensure they offer anyone who can fog a mirror $0 down/$0 a month for a thousand years deals. What is in doubt (well not really….) is the sustainability of it all.
Where do these discounts exist?? I am not seeing it in the NYC metro or Boston areas (even though there are many mass transit options). All discounts are now based on “dealer posted price” which is at least 10% over full MSRP. By your own logic, if the Ford F-150 is the most popular vehicle in the USA (for reasons I don’t know it is ugly, hard to park on the street and probably ridiculously expensive to insure & repair) then of course dealers would be marking up over full MSRP (Honda dealers did this for years).
I mean when even support admin assistants are driving nearly Lincoln Navigators (which probably cost a years gross pay) it seems that price doesnt matter only the easy (no money down 72 months 0% financing) credit
We leased our daughter a car. It was actually about the same as our monthly Uber/Lyft bill. Very inexpensive and a great vehicle.
oh how nice parents paying their kids bills — when is she expected to pay for her own stuff?? Its so socially acceptable now and explains how in the Boston area every fresh faced twenty something has the latest Macbook pro, Iphone and several Canada Goose coats and the wealthy kids get new BMWs , the rest use Uber /Lyft when they can’t use their university shuttle (you know so these snowflakes don’t have to interact with the ‘wrong element’ from places like Roxbury or Dorchester.
Sad to see how many helicopter parents have trained their children to be unable to do for themselves. Holding an after school job (in high school) is not just a source of weekend money, it also teaches responsibility, hard work and perseverance. Too many kids get an allowance and they don’t even clean up their own rooms.
When those kids grow up, daddy sets them up with a cushy job because the kid has absolutely no clue. Of course, daddy can only pull strings for so long — and then junior has to suddenly adapt.
I had a kid (college grad) interview last spring. His mom came with him to the interview. I can’t make something that crazy up. His mom came with him to a job interview, post college.
Yes I see this is the new normal for college age kids in the Boston area. It also helps if you look like Mitt Romneys or the Trump kids
*** Leased a car for our daughter… It will not let me edit the post.
I have heard that auto “sales” are counted the moment they were shipped to dealers and that would explain things but I talked to Calculated Risk just a moment ago and he thinks sales are actual sales.
McBride not correct.
From GM’s 10-Q:
Total vehicle sales data represents: (1) retail sales (i.e., sales to consumers who purchase new vehicles from dealers or distributors); (2) fleet sales, such as
sales to large and small businesses, governments, and daily rental car companies; and (3) vehicles used by dealers in their businesses, including courtesy
transportation vehicles.
Found similar for Ford.
Once it leaves the factory it is considered “sold”.
.
I do not read it that way. Sales = retail + fleet + dealer loaner cars. There is no mention of dealer inventory.
Really?
“vehicles used by dealers in their businesses”
How is that not a catch-all which includes inventory?
Anyways, vehicle sales are reported on 3rd business day of month. No way manufacturers can get prior month’s sales from thousands of dealers and report on it in 2 days.
” Although the retail/fleet mix is not yet known, the strong performance of some vehicle lines suggests heavy fleet activity may have occurred for some brands.”
Fleet sales are not retail sales.