New vehicle sales were down in August compared to July while new and used combined vehicle sales increased, according to MarketWatch and Cox Automotive.

Cox Automotive Chief Economist Jonathan Smoke reported Sept. 4 that new car sales were up 8% and used car sales increased by 4%. Financing options also improved as 12.1% of rates fell below 3% while average loan rates remained stable amidst changing bond yields, Smoke said.

“Both new- and used-vehicle supplies have tightened, and for the first time this year, used-car prices showed a marginal rise,” he said. “Finally, Cox Automotive’s leading indicators depict a mixed outlook, with some year-over-year declines in leads but month-over-month improvements suggesting potential recovery.”

Smoke’s report also notes a decline in consumer spending volatility and stable unemployment levels along with mixed consumer sentiment that rebounded slightly in August but later fell.

MarketWatch reports that part of the decline in new vehicle sales was expected following a temporary boost in July.

“Sales in that month benefited by the recovery from a cyberattack that crippled auto dealers’ computer systems across the country earlier in the summer,” the article says.

While interest rates remain high, Oxford Economics Deputy Chief Economist Michael Pearce told MarketWatch “the headwind to demand from stretched affordability remains a big constraint on sales,” adding that despite that auto sales are relatively solid and indicate a stable U.S. economy.

According to Reuters and other national media outlets, the Federal Reserve is expected to lower interest rates at its meeting this month, possibly by 25 basis points followed by another 25 at each of the U.S. central bank’s two remaining policy meetings this year.

During the Fed’s annual economic conference held in Jackson Hole, Wyoming on Aug. 23, Chair Jerome Powell said “the time has come for policy to adjust.”

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he said, according to the Associated Press.

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