Earlier this week the Commerce Department released figures on vehicle sales. As usual, the big headlines went to sales of autos and light trucks, which were up 0.4% in April and up 9.4% from a year ago. These figures always get the most attention because it tells us what’s happening with consumers.
However, the report also included sales of medium and heavy trucks, which are almost all used by businesses. These vehicles were sold at a 325,000 annual rate in April. That’s down 5.5% from March (the series is very volatile from month to month) but still up 19.5% from a year ago. As the chart above shows, every recession in the past 40+ years (shaded areas in chart are recessions) has been preceded by a major decline in sales of medium and heavy trucks. Sometimes sales of these trucks decline a great deal and no recession follows, but if there is not a major decline, it looks like we are safe from recession.
As the chart above shows, we are nowhere near as large a decline as the ones that have preceded prior recessions. Moreover, with housing picking up, it’s unlikely we’ll see any significant downturn in medium and heavy truck sales anytime soon. Another reason to ignore the double-dippers.