US sales of light vehicles fell by about 7pc in May from the prior month, as Americans pulled back from purchases of big-ticket items amid rising borrowing costs and concerns of an economic slowdown.
Sales of light vehicles — light trucks and cars — fell to a seasonally adjusted annual rate of 15mn vehicles in May from a 16.1mn unit pace in April, which was the highest in nearly two years, according to the Bureau of Economic Analysis (BEA). Light vehicle sales were at a 12.6mn unit rate in May last year.
Rising borrowing costs on the back of aggressive rate tightening by the Federal Reserve, high inflation and a slowing economy have prompted many consumers to hold back on purchases of big-ticket items like cars and houses. Still, supply-chain constraints on car output have largely eased and a healthy labor market and wage growth are continuing to spur demand.
Sales of light trucks fell to an 11.9mn annual unit pace from a 12.8mn unit pace in the prior month. Sales were at a 10mn unit pace in May 2022.
Sales of cars fell to a 3.1mn unit annual rate in May from a 3.3mn pace in April. Sales were at a 2.6mn rate in May last year.
Domestic US auto production rose to a seasonally adjusted 166,200 units in April from 156,900 vehicles in March and 145,600 units in April last year. The data is presented with a one-month lag to sales.
