Mid-Month Market Watch

🎢 Economic Ups and Downs:

☝️Consumer spending was up 17% in September with transportation and services leading the way.

👇 Core price inflation continues to decline on a year-over-year basis.

☝️ Wages are up 10.2% since 2019, equating to an additional $854 per month for families earning $100K annually.

👇 Homeowners have been rushing to refinance with 62% of mortgages now below 4%, and 24% below 3%.

☝️ Credit card debt increased by $14.68B (though consumers are taking out fewer auto and student loans).

👇 So far, October has shown a decline in consumer sentiment.

🩴 New-to-Used Value Shifts:

• In 2019, the new car premium was a whopping 55%, now it's a measly 15%, making used cars a competitive choice.
• Consumers, once enticed by warranties and that new car smell, now find used vehicles more financially appealing.

📈 Pent-Up Demand and Retail Sales:

• Automakers' production dip led to an 8.1M shortfall in new vehicles.
• Retail sales rose by 30% in new cars and 6% in used cars YOY, though recent data indicates a plateau.

📉 Day Supply and Pricing Trends:

• Softening retail sales led to a 7% increase in new car day supply and a 3% rise in used cars.
• Used car prices fell by 2.6%, aligning with recent retail price declines.

📊 Wholesale and Acquisition Insights:

• Truck segment stood out with a 1% YOY rise, while other segments dipped.
• Wholesale conversion rate mirrors 2021-2022 numbers at 55.1%, with 26 days of inventory supply.
• Margin compression eased slightly, but dealers continue to grapple with inventory shortages.