US sales of light vehicles fell to 15mn pace in May

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.

By Robert Willis