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Domestic Car Sales Cap Record Year With Up (and Down) Month
US car sales are going to have a record year in 2015, clearly one of the bright spots in the US economy. Judging from revisions in construction spending, perhaps the only bright spot left besides very lagging jobs data.
December New Car Sales Decline
Today I note from Bloomberg that Domestic New Car Sales Declined in December.
"The Big Three are in and December sales are running below expectations, down about 5 percent from November vs expectations for a 1 to 2 percent decline. Car sales are especially weak with sales of light trucks down only slightly. The Big Three account for roughly half of all sales. Foreign brands will be posting their results through the session."
December New Car Sales Rise
One sees a completely different portrayal in the Wall Street Journal article U.S. Car Sales Poised for Their Best Year Ever.
U.S. new-car sales accelerated through December as auto makers remained poised to report their highest annual sales ever, shattering the record set in 2000.Sales Purportedly Up (and Down)
Car sales are on track for their best-selling month of the year and their best December ever.
General Motors Co. estimates the seasonally-adjusted annual selling rate for light vehicles was 17.8 million units in December and predicted 17.5 million vehicles were sold in the year, surpassing the 2000 record of 17.4 million.
Ford Motor Co. reported sales increased 8.3% to 237,606 vehicles for the Detroit auto maker’s best December. Sales of F-Series pickups rose above 85,000 for a 10-year high, and Ford brand SUV sales saw their best December since 2003.
GM, meanwhile, logged a 5.7% increase to 290,230 vehicles as Chevrolet Silverado and GMC Sierra sales momentum continued through the final month of the year.
Can sales be up and down? Clearly not, so who is correct?
The answer is Bloomberg. The reason pertains to the number of selling days.
- December 2015 had 28 selling days vs. 26 selling days in December 2014 according to JD Power.
- November 2015 only had 23 selling days and only four selling weekends for the first time since 2012 according to JD Power.
Based on selling days alone, month over month car sales should be up 5/23 or 21.74%. They weren't. Other seasonal adjustments apply, such as the average December vs. the average November, but the bottom line is the reported month-over-month sales are not what they appear to be at first glance.
Despite the hoopla, December car sales are actually down vs. November. Moreover, sales are "especially weak", given "sales of light trucks are down only slightly".
Mike "Mish" Shedlock