Auto Sales Surge 1.8% in August, Spending Flat Ex-Autos

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A surge in auto sales buoyed consumer spending in August. Ex-autos, retail spending was flat.

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

Comments (28)
No. 1-13
Sechel
Sechel

Always pays to dig, I was going to guess more sub-prime financing, but dealer incentives and fleet sales are always a suspicion

“August sales are coming in hot as aggressive incentives lifted the market above our forecast," said Charlie Chesbrough, senior economist at Cox Automotive. "The surprisingly strong numbers may be misleading. 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."

Mish
Mish

Editor

" 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.

Mish
Mish

Editor

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.

KidHorn
KidHorn

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.

Sechel
Sechel

More digging.

Forecasters expect an increase in U.S. auto sales in August, boosted by an early Labor Day weekend that falls entirely within the August sales total — instead of some in August and some in September, at least for auto-industry accounting purposes.

RobinBanks
RobinBanks

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.

Country Bob
Country Bob

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.

Country Bob
Country Bob

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%

Harry-Ireland
Harry-Ireland

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.

JonSellers
JonSellers

Interest rates going down and prices going up.

Tony Bennett
Tony Bennett

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.

Matt3
Matt3

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?

JMOD46
JMOD46

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"?