U.S. light-vehicle sales fell by 3.0% compared to this time last year. Many segments posted declines or were flat, although the popular pickup and crossover segments gained market share relative to January 2018.
During the 35-day federal government shutdown—the longest in U.S. history—as many as 2 million workers went without paychecks. Federal employees will receive their missed pay, but federal government contractors will not. Coupled with crippling winter storms from the polar vortex, which ground cities and states to a halt, the shutdown contributed to a sharper-than-expected drop in sales. Uncertainty about another looming government shutdown may cause workers to again delay purchases in February.
But aside from these headwinds, the current state of the economy is strong. Both the tight labor market, which is causing wage growth to accelerate, and solid consumer spending are bolstering our expectations for a solid year of new-vehicle sales. So while 2019 sales will fall somewhat compared to 2018, we expect to close out the year with very respectable sales of 16.8 million units.