Americans are buying cars and trucks at much faster pace than a year ago, suggesting that the surge in single-family home buying is spilling over into auto sales.
Industry consultants J.D. Power and LMC Automotive said Wednesday that their estimate was for sales in October to be three percent higher than a year ago.
That includes an adjustment for selling days because October included one day more selling than a year ago. Without the adjustment, the increase would be 6.8 percent from last October.
This is the second consecutive month of increased sales. The annual gains are even more remarkable because millions of Americans have lost their jobs in recent month to pandemic-related layoffs and stimulus from the federal government has largely run out.
“Two consecutive months of year-over-year retail sales increases demonstrates that consumer demand is showing remarkable strength,” Thomas King, president of the data and analytics division at J.D. Power, said.
Average prices are expected reach another all-time high, rising 7.3 percent to $36,755, according to J.D. Power.
“The shift towards more expensive trucks and SUVs remains a key driver, with those two segments on pace to account for a combined 77 percent of retail sales compared to 73 percent prior year,” J.D. Power said.
In addition to a shift away from cities in favor of suburbs, demand is being supported by low gasoline prices, low interest rates, and a desire to avoid mass transit. Many families are traveling exclusively by auto, avoiding planes and trains. Commuters who have returned to work are driving instead of taking commuter rail lines. These factors have more than offset those that might depress demand, such as an increase in working from home.
Dealers are still facing inventory constraints from the shutdown of autoplants this spring but that is improving as the lockdowns recede in time.
“Looking ahead to November, progress in relieving inventory constraints, coupled with the strong underlying consumer demand means that the strong sales pace will persist,” J.D. Power said.