Transcript Car and Truck Sales

Econonomic Indicator
Car and Truck
Sales
ECON 435
Jesse Walia
Christoph Lilienfein
1
Table of Content
Introduction
 Content of the report
 Economic Importance
 Data sets (past and current)
 Data Analysis
 Conclusion

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Car and Truck Sales
Published by: Motor Vehicle
Manufacturers and Importers
 Frequency: Monthly
 Period Covered: Prior month
 Market significance: moderate (due to
frequency)


Leading indicator of economic activity.
Undergoes revisions.
3
What is it?



Auto and Truck Sales measure the monthly
sales of all domestically and foreign produced
vehicles.
Important indicator of consumer demand,
accounting for roughly 25% of total retail sales.
Demand for big ticket items such as autos and
trucks tends to be interest rate sensitive, making
the motor vehicle sector a leading indicator of
business cycles
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What is it in the report?

Provides unit data
On unadjusted and seasonally adjusted auto
and truck sales
 Domestic auto production
 Canadian and Mexican auto imports, auto
exports, and
 Domestic auto inventories.

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Why is it important?


25% equals to a large percentage of annual total
retail sales (annually adjusted).
It’s a good reflection of consumer spending,
which accounts for nearly two-thirds of all
economic activity. This monthly report provides
significant clues as to the pace of quarterly
gross domestic product (GDP), one of the
primary indicators used by the Federal Reserve
in setting monetary policy.
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Impact on the Economy
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How is the data gathered



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The individual vehicle manufacturers report their sales
results during the first three or four days of the month.
A day after the last manufacturer reports the Bureau of
Economic Analysis (BEA) releases its estimate of unit
auto sales.
About a week after that the BEA releases its estimate of
unit truck sales.
The Census Bureau releases its retail sales report,
including a measure of sales at automotive dealers,
usually around the 13th of the month.
Roughly two weeks after that the BEA releases its
personal income and outlays release, including a
measure of spending on motor vehicles and parts.
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Latest Release

Auto Sales

Continued decrease in domestic vehicle sales:
 Autos
(all passenger cars, including station
wagons): Sales are down .084* units from the
previous month (April).
 Light Trucks (trucks up to 14,000 pounds gross
vehicle weight): Sales are down .472* units from
the previous month (April).
 Heavy Trucks (trucks more than 14,000 pounds
gross vehicle weight): Sales are down .052* units.
(* in thousands)
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Latest Release
Auto Sales [Seasonally adjusted at annual rates (Millions)]
Domestic
Foreign
Mar.
Apr.
∆
Mar.
Apr.
∆
5.104
5.02
-0.084
2.473
2.303
-0.17
Light Trucks 7.711 7.239
-0.472
1.416
1.45
0.034
Autos
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Historical Data
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Historical Data
700.0
700.0
600.0
500.0
400.0
300.0
200.0
100.0
0.0
600.0
500.0
2007 - Q1
400.0
2000 - Q1
2000 - Q1
2007 - Q1
300.0
200.0
100.0
1
2
3
0.0
1
2
3
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Data Analysis (historical)

Truck sales ↑ car sales ↓
why?
Incentive of 0 APR financing, despite rising gas
prices.
→ shift in consumer spending to domestic
manufacturers (light trucks, trucks)
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Data Analysis
2000 vs. 2007
2000 (recession)
increase in MS → IR ↓ → C, I ↑ → loans ↑
> consumer spending ↑
 2007
high(er) IR → C, I ↓ → loans ↓
> consumer spending ↓

Conclusion

Good gauge for economic well being
> accounts to large portion of retail sales
> direct effect on other “branches” of the
economy e.g. banking, loans, labor
market, etc.
> strong correlation with actual IR
Thanks
for your attention