December Light Vehicle Sales

January 4, 2007 – Based on this week’s reports from the vehicle makers, U.S. car and light truck sales rose by about 0.7M units in December to an estimated 16.7M unit seasonally adjusted annual rate (Chart 1).

Chart 1. Light vehicle sales. January 2000 through December 2006.

For 2006 as a whole, light vehicle sales averaged about 16.5M units. That’s 0.4M units less than 2005, but still a healthy level by broad historical standards (Chart 2).

Chart 2. Light vehicle sales. January 1968 through December 2006.

Compared to their Q3 average, light vehicle sales fell by about 0.3M units to about a 16.3M unit annual rate in Q4 (Chart 3). This relatively small decline should not play a major role in Q4 consumption growth.

Chart 3. Light vehicle sales. Q1 2000 through Q4 2006.

In fact, despite this weakening in Q4 light vehicle sales, the available monthly data (through November) show real consumption growth tracking at a hefty 4.8% annual rate for the first two months of Q4 (Chart 4). In Q3, real consumption rose at a 2.8% annual rate.

Chart 4. Real consumption growth. Q1 2000 through Q3 2006 and Q4 2006 to date.

Suzanne Rizzo

Sources:

WardsAuto.com (http://www.wardsauto.com) - car and light truck sales by manufacturer for December, 2006.
U.S. Department of Commerce, Bureau of Economic Analysis (http://www.bea.gov) - historical data and seasonal adjustment factors for industry light vehicle sales, personal consumption expenditures.
National Bureau of Economic Research (http://www.nber.org) - recession dates.