ARLINGTON, Va.—Total vehicle sales slowed in November, falling from 16.3 million annualized units to 15.6 million during the month, representing an 8.1% decrease in sales levels versus last year. Separately, new government data show job growth slowed in November.
In terms of auto sales, NAFCU Chief Economist and Vice President of Research Curt Long noted there’s a caveat: November had three fewer selling days and one fewer weekend than in November 2019.
"Given the challenges that rising COVID cases pose for both supply and demand, the short-term outlook is poor, but the medium- to long-term outlook is strong as vaccine progress advances," said Long. "NAFCU expects vehicle sales to remain flat over the next month or two, but the arrival of a vaccine and the increasing odds of another stimulus package point to a healthy spring."
Sales of cars declined slightly during the month, falling to 3.8 million annualized units, a 13.7% decrease compared to November 2019.
Of note, light truck sales have been strong since the start of the pandemic, but have started to slide, falling to 11.8 million annualized units. Light truck sales are now down 6.1% compared to last year.
Job Growth Hits the Brakes
Separately, the U.S. economy added 245,000 jobs in November, the lowest gain since the economy began to rebound in May. Long described the growth was "not nearly fast enough given the unemployment overhang."
"The retail sector is better positioned for a pivot away from brick and mortar [than restaurants], as transportation and warehousing employment increased," said Long. "However, both the number of those out of work more than six months and the number of workers on permanent layoff grew during the month, and it is these areas that were so stubborn in the recovery from the financial crisis.
"This data should provide more impetus for Congress to pass a stimulus effort in order to nurse the recovery through the initial months of 2021," continued Long. "NAFCU expects broad softening in the economy in the very near term, followed by strong growth once a vaccine is widely available."
Hourly Earnings Are Up
Average hourly earnings rose nine cents in November, with year-over-year growth reaching 4.4%. Of note, the October employment number was revised downward to 610,000.
The labor force participation rate slipped 0.2%, significantly down from 63.4% in February. Results among the major industries were weak, transportation and warehousing gained 145,000 jobs, followed by professional and business services (+60,000), and education and health services (+54,000), Long said.
Government employment fell by 99,000 jobs, largely driven by losses in temporary workers for the Census.