– November 4, 2019
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Sales of light vehicles totaled 16.5 million at an annual rate in October, down from a 17.1 million pace in September (see chart). Though the pace of sales slowed in October, it remains within the 16 to 18 million-unit range that we have seen for much of the past two decades. Unit vehicle sales fell significantly below the range as the 2008–9 recession began, hitting a low of just 9.0 million in February 2009. Sales began a slow recovery and returned to the 16 to 18 million range in March 2014 and have remained there for 68 consecutive months (see chart).

As of October 2019, light-truck sales totaled 12.2 million at an annual rate while cars managed just 4.4 million, the lowest total since the 1960s. That puts the light-truck share at 73.7 percent, completely dominating the car share of 26.3 percent. The rising share of light trucks continues a trend in place since 2013 (see chart). In February 2013, the split between cars and light trucks (SUVs and pick-up trucks) was about even, with both segments selling about 7.76 million at an annual rate.

Recent data on third quarter gross domestic product suggest the economy continues to expand but at a somewhat slower pace. The moderate pace of job creation in the October jobs report and continued low levels of initial claims provide some reassurance that the labor market remains solid. The solid labor market should support future gains in income and spending and provide a foundation for continued economic expansion. However, the slower pace of growth may leave the economy more vulnerable to erratic policies and elevated uncertainty.

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Robert Hughes

listpg_hughes Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.
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