Strongest month for US auto sales since July 2005

New US light vehicle sales had another bumper month in August with 17.7mn units sold (on a seasonally-adjusted annualized basis). This was up from 17.5 million last month and above market expectations for 17.3 million units. Due to the later holiday, Labor Day sales were not included in August this year. As they were included last year, the year-over-year comparison isn't a fair one. Still some automakers stood out from the lot. Sales at Kia (+7.7% Y/Y) and Ford (+5.6% Y/Y) led the way, with Hyundai (+2.9% Y/Y) and FCA (+1.4% Y/Y) sneaking in smaller gains. GM (-0.7% Y/Y) and Nissan (-0.8% Y/Y) saw small declines, while sales fell slightly more at Honda (-6.9% Y/Y) and Toyota (-8.8% Y/Y).

As has been the case all year, the light truck segment continued to lead the way in August, with sales rising by 8.1% Y/Y, while passenger cars saw a steep decline of -10.3% Y/Y. Light trucks accounted for 57.3% of total sales during the month, compared to 52.7% in August of last year.

Because of the calendar quirk, expectations were relatively low coming in and August blew them out of the water, with the strongest sales volume in ten years. This speaks to the resilience of the domestic auto market. Moreover, with the Labor Day weekend boost to sales falling in September this year, the good news should continue through next month.

Another positive takeaway is that at least so far, the financial market turbulence of the past few weeks has not shaken consumers from spending on big ticket items. Evidently, labor market strength and healthy real income growth continue to fuel consumer spending. With these domestic factors expected to remain robust, consumer expenditures are expected to grow by 3.0% this quarter. Even with decent Q2 auto sales figures, the third quarter looks even stronger, and sales for the year are currently tracking north of 17 million.