A Autos

U.S. New Vehicle Sales Fell For The First Time Since April, Flashing GDP Slowdown

05 November, 2020

As I flagged, U.S. New Vehicle Sales surprised to the downside in October. According to Wards data, they decreased by 0.8%, reaching 16.21M SAAR and coming below the Bloomberg consensus of 16.50Me. It was the first drop since April. The decline in sales was concentrated in the light truck segment while sales of passenger vehicles were resilient.


The October’s fall is a negative sign in a context where the federal government’s CARES Act programs for the most part expired at the end of July and a new wave of coronavirus recently hit several states in cooler regions. The trend is likely to deteriorate further in the coming months with coronavirus spreading through the entire country while uncertainty linked to the election could spark uncertainty.



In this context, the auto sector could weigh negatively on October retail sales that will be released on November 17th. It confirms my view that, at best, 4Q GDP growth will slow dramatically compared to 3Q while another GDP contraction looks credible at this stage. The fact is the rapid spread of Covid-19 will force more states to implement restrictive measures in the coming weeks.