US light vehicle sales bounced back in July

Domestic light vehicle sales rebounded in July, rising to a seasonally adjusted rate of 15.8mn on the strength of greater car purchases.

Sales of light vehicles — trucks and cars — increased from a seasonally adjusted annual rate of 15.2mn in June, the Bureau of Economic Analysis reported Friday. July's rate, the largest month-on-month gain since February, edged down from a 15.9mn unit rate in June 2023.

US buyers continued to spend last month, as job and wage gains so far this year have been stronger than expected and as sentiment strengthened that the US Federal Reserve was on track with its monetary policy to achieve a "soft landing" — bringing down inflation without sending the domestic economy into a recession.

However, a labor report released last week painted a bleaker economic picture, showing fewer job gains than expected in July and further gains in the unemployment rate.

That spurred greater bets that the Fed would cut borrowing costs by 50 basis points at its September meeting, which should lower auto lending rates and boost auto sales. Still, recession fears may keep consumers from any big purchases in the near term.

Sequential car sales rose by 9.1pc to a 3mn unit rate in July from a 2.75mn unit rate in June, while sales of light trucks rose by 3.1pc to a 12.8mn unit rate in July from 12.43mn unit rate in June.

Domestic auto production dropped to a seasonally adjusted rate of 134,200 in June, down from May's 135,400. That compared with a 144,800 unit rate in June last year. Auto assemblies are reported with a one-month lag to sales.

By Alex Nicoll