US automotive sales in July slipped after reaching their highest level this year in June, as consumers tempered purchases but continued to spend in the face of renewed inflationary pressures after the US and Iran resumed hostilities.
Sales of light vehicles, which are pickup trucks and cars, fell to a seasonally adjusted annual rate of 16.3mn units in July, down from an upwardly revised 16.6mn in June, the Bureau of Economic Analysis reported on Tuesday.
Last month's total represented a 1.8pc decrease from July 2025's annualized rate of 16.6mn.
Buyers — primarily affluent ones — continued to spend in July, buoyed by continuous gains in equity markets that have increased household wealth. Still, affordability concerns linger with fuel prices rising again after the ceasefire agreement in the Middle East broke down and markets still expecting the US Federal Reserve to raise its target interest rate this year, which would raise borrowing costs.
Average US retail gasoline prices ended the week of 3 August at $4.079/USG, representing an 8pc increase from the week ended 6 July, the latest US Energy Information Administration data shows. The Chicago Mercantile Exchange's FedWatch tool is showing a 53pc probability of a quarter-point rate hike at the Fed's September meeting, as policymakers seek to reel in inflation that remains nearly double their 2pc target.
Sales of pickup trucks in July fell by 1.8pc to a 13.6mn annual unit rate on the month, while car sales ticked up by 0.6pc to a 2.7mn unit rate in the same period.
US vehicle production in June increased to a seasonally adjusted rate of 10.68mn units, rising from an upwardly revised 10.41mn in May, the latest Fed data shows.
Auto assemblies are reported with a one-month lag to sales.
