Week in Signals: May 4-9, 2026

4-minute read

Every number that moved the market last week, and what's coming at you this week.

What Just Happened

The Fed held. Again. And this time it got loud.

The April 28-29 FOMC meeting ended with rates unchanged at 3.50-3.75%, but the vote was 8-4, the most dissents since October 1992. Fed Governor Miran voted FOR a cut. Three others opposed the easing bias language entirely. Powell, in what may be his final press conference as Chair, said flat out: "If we need to hike, we will hike." Rate cut probability for 2026 collapsed to roughly 3% after the meeting. Markets are now pricing no move through mid-2027.

For dealers: auto loan rates are priced off the 10-year Treasury, not the Fed funds rate. This hold changes nothing at the payment level. OEM programs remain the only lever moving monthly payments right now.

Kevin Warsh is heading to the Senate floor. His confirmation hearing is complete. A floor vote could come any day this week.

The economy grew. Your customer's wallet didn't feel it.

Q1 GDP came in at 2.0% on April 30. The headline looks fine. What's underneath it doesn't. Consumer spending slowed. The growth came from government and investment, not households. Meanwhile the Fed's preferred inflation gauge, PCE, ran at 4.5% annualized in Q1. Gas spiked 11.6% in March alone. That's above $4 a gallon in most markets.

The practical translation for dealers: your customer is being squeezed from two directions at once. Their costs are up and their confidence is down. That is not a rate problem. That is a value conversation problem. The customer sitting across from you needs to understand what they're getting, not just what they're paying.

The big OEMs beat but they're bracing.

Ford posted $3.5B adjusted EBIT. GM posted EPS of $3.70 against a $2.61 estimate. Both raised full-year guidance. But both flagged $2B in commodity headwinds, and tariff price increases are expected to hit consumers most visibly between May and August. BMW is already raising Mexico-built 3-series prices 4% this month. The tariff offset rate for U.S.-assembled vehicles dropped from 3.75% to 2.5% of MSRP on May 1. That margin compression is now baked in.

April SAAR came in at roughly 16.1-16.3M.

Down from 16.3M in March and below April 2025's 17.1M. That year-ago comp was inflated by tariff pull-forward buying. The decline is real but the context matters. Final official count expected early this week.

On wholesale pricing: directional, not definitive.

Black Book's week ending April 25 showed cars dipping -0.09% after eight consecutive weeks of gains. Trucks and SUVs held at +0.14%, with compact crossovers on an 11-week run. The official Manheim April MUVVI drops Thursday, May 7. Mid-April flash was 213.0, down from March's 215.3.

Wholesale indices are useful directional signals, but composite views of retail market conditions, what consumers are actually transacting at, are stronger indicators of where the market is heading. Wholesale can reflect auction dynamics, fleet activity, and timing that doesn't always map directly to what's happening on your lot. We watch it as one input, not the story.

The service drive data just landed, and it's definitive.

All six major public dealer groups reported Q1 2026 earnings last week. The story is the same at every one of them. Fixed operations generated 45 to 50 cents of every gross profit dollar while representing only 12 to 19 cents of every revenue dollar. New vehicle gross profit fell 7% to 17% year over year at every group. Fixed ops gross profit grew 5% to 10% year over year at every group. We're going deeper on this. Coming soon.

What's Coming This Week

Thursday, May 7: Manheim April MUVVI (official) — Does the spring bounce hold or does the mid-April pullback solidify?

Friday, May 8, 8:30am ET: April Jobs Report — Consensus +165K, unemployment 3.8%. If it comes in strong, the 10-year moves up, auto loan rates follow. Manufacturing and auto-sector numbers are the line to watch.

Friday, May 8, 10:00am ET: Michigan Sentiment May Preliminary — April final was 49.8, the lowest reading since 1952. Year-ahead inflation expectations at 4.7%. If May holds or rises, the consumer anxiety building since January does not ease heading into summer.

Tuesday, May 12: CPI April 2026 — The most-watched number of the month. Not the monthly print. The cumulative context. $100 in 2020 buys $79 today. Transportation up 33%. Prices did not fall. They stopped rising as fast.

The Number That Should Be on Your Whiteboard

$2,514. AutoNation's average new vehicle gross profit per unit in Q1 2026. Down 10% year over year. Meanwhile their fixed operations generated $593 million in gross profit, more than four times their new vehicle gross. The same math, in slightly different ratios, holds at every public group.

The service drive is not a department. It is the business. More on this shortly.

One More Thing Worth Your Attention

On May 8, the Federal Reserve published a deep research note on Buy Here Pay Here auto lending. The headline numbers: $32 billion in outstanding loans, up 214% since 2018. Delinquency rate 2.65 times higher than traditional auto finance. Active repossession 16.63 times more likely. The sector's largest player, Tricolor, went bankrupt in 2025 alongside fraud allegations and took $200 million each from Fifth Third and JPMorgan.

Here is why this matters to a traditional dealer.

The BHPH customer is not a stranger. They are your declined deal. They sat across from your F&I manager, did not qualify for conventional financing, and walked out. Then they went down the street, signed a 55-month loan at 25% interest with weekly payments, and drove off in a $15,000 car.

That person comes back. In 18 months or 36 months, harder to finance, more skeptical, with a repossession or charge-off on their bureau and a story about the last place they trusted. The BHPH market is the pipeline your declined customers flow into. The Fed just told you what is happening in that pipeline.

Full deep dive on this coming this week.

Daniel Govaer

EVP Product VINCUE | Loyalty Project Manager Beaver Toyota | Dealer Innovation Group Facilitator MyKaarma | Former Award Winning Mercedes-Benz General Manager | NADA Academy Class N367 Graduate

dgactual.com | @DGActual