Introduction to Used Vehicle Prices

A Ford Mustang is seen at a used car dealership in Montebello, California on May 5, 2025.
Frederic J. Brown | AFP | Getty Images
DETROIT — Used vehicle prices last month eased from their recent high in April as consumers who may have needed a vehicle but feared price hikes due to tariffs flocked to purchase a car or truck, according to a closely watched barometer of preowned prices.

Used Vehicle Value Index

Cox Automotive’s Manheim Used Vehicle Value Index — which tracks prices of used vehicles sold at its U.S. wholesale auctions — decreased 1.5% from April to May, but remained 4% higher than a year earlier. April’s level was the highest since October 2023.
"Wholesale appreciation trends were remarkably strong in April, but the market gave some of that strength back in May, though values remain well above last year’s levels," said Jeremy Robb, senior director of economic and industry insights at Cox Automotive.

Impact on Retail Prices

Retail prices for consumers traditionally follow changes in wholesale prices, but they have not fallen as quickly as wholesale prices in recent years.
While President Donald Trump’s tariffs of 25% on new imported vehicles and many parts do not directly impact used car sales, changes in new vehicle prices, production and demand affect the used car market, which is how the majority of Americans purchase a vehicle.

Demand and Inventory Levels

Demand has stayed relatively strong as inventory levels for used vehicles – 2.2 million – remain low compared with historical levels. That comes as consumers have been holding on to their vehicles for longer and as the industry deals with less production in recent years amid the coronavirus pandemic and global supply chain shortages.
Cox reports retail used vehicle sales in May were down 3% compared with April but higher year over year by 4%.

Stabilization of Used Vehicle Prices

Cox previously said it was seeing used vehicle prices continue to stabilize after swinging wildly for several years before starting to calm down in 2024.

Conclusion

In conclusion, used vehicle prices have eased from their recent high in April, but remain higher than last year’s levels. The market is expected to continue stabilizing, with demand staying relatively strong and inventory levels remaining low.

FAQs

Q: What is the current trend in used vehicle prices?

A: Used vehicle prices have eased from their recent high in April, but remain 4% higher than a year earlier.

Q: What is the Manheim Used Vehicle Value Index?

A: The Manheim Used Vehicle Value Index is a closely watched barometer of preowned prices that tracks prices of used vehicles sold at wholesale auctions.

Q: How do tariffs on new imported vehicles affect the used car market?

A: Tariffs on new imported vehicles do not directly impact used car sales, but changes in new vehicle prices, production, and demand can affect the used car market.

Q: What is the current demand for used vehicles?

A: Demand for used vehicles has stayed relatively strong, with retail used vehicle sales in May down 3% compared with April but higher year over year by 4%.

As the Department of Government Efficiency (DOGE) concludes its cost-cutting initiatives, the ripple effects of mass layoffs continue to impact federal employees and the broader job market. The Trump administration’s aggressive downsizing efforts have led to significant job losses across various federal agencies, raising concerns about the long-term implications for public services and the economy.

Economic Uncertainty and Job Market

The broader economic landscape remains volatile, with trade tensions and policy shifts contributing to uncertainty. While the April jobs report exceeded expectations, private-sector hiring has slowed, with ADP reporting the lowest growth in over two years. Companies are increasingly citing artificial intelligence (AI) as a factor in workforce reductions, signaling a shift in hiring practices and organizational structures.

Companies Announcing Layoffs

Several major corporations have announced significant layoffs in recent weeks:

• Procter & Gamble: The consumer goods giant plans to cut 7,000 jobs, approximately 15% of its non-manufacturing workforce, over the next two years as part of a restructuring effort aimed at streamlining operations and reducing costs.

• Microsoft: The tech company announced the reduction of about 6,000 employees, or 3% of its global workforce, to flatten management layers and improve efficiency.

• Citigroup: The financial institution is set to reduce its staff by around 3,500 positions in China, primarily affecting the information technology services unit, as part of a broader reorganization strategy.

• Walmart: The retail giant plans to eliminate approximately 1,500 jobs across various divisions, including global technology and U.S.-based e-commerce fulfillment, to simplify operations amid rising costs.

• Klarna: The fintech company has reduced its headcount by 40%, attributing the cuts to AI investments and a hiring freeze that led to attrition.

• CrowdStrike: The cybersecurity firm announced plans to cut 500 employees, about 5% of its staff, citing AI’s transformative impact on the industry and the need to evolve its operating model.

• Disney: The entertainment conglomerate is set to lay off several hundred employees worldwide across various divisions, including film and TV marketing, as part of efforts to enhance operational efficiency.

• Chegg: The online education company will lay off 248 employees, representing 22% of its workforce, in response to the growing influence of AI-powered tools in the education sector.

• Amazon: The e-commerce leader plans to eliminate about 100 jobs in its devices and services division, including teams working on Alexa and Echo products, as part of ongoing cost-trimming efforts.

• Warner Bros. Discovery: The media company will lay off fewer than 100 employees across various divisions, aligning with its recent reorganization into two main units: global linear networks and streaming and studios.

Impact on Federal Workers

The federal workforce has not been immune to these trends. The Trump administration’s initiatives have led to the loss of nearly 60,000 federal jobs, with projections indicating further reductions in the coming year. Agencies such as the Department of Education, Department of Veterans Affairs, and the Environmental Protection Agency have experienced significant staffing cuts, prompting legal challenges and public outcry.

In particular, the Department of Education faces a potential 40% reduction in staff, a move currently under judicial review. Similarly, the Department of Veterans Affairs plans to cut 15% of its workforce, raising concerns about the impact on veteran services. The Environmental Protection Agency has already laid off over 300 employees, affecting its capacity to enforce environmental regulations.

Legal and Political Challenges

These sweeping changes have sparked legal battles and political debates. Federal judges have issued injunctions blocking some of the proposed layoffs, citing the need for congressional approval and the potential harm to public services. The administration has appealed these decisions, seeking Supreme Court intervention to proceed with its downsizing plans.

Critics argue that the rapid implementation of these workforce reductions undermines the stability and effectiveness of federal agencies. Supporters contend that the measures are necessary to eliminate inefficiencies and reduce government spending.

Conclusion

As the federal government and private sector navigate these transformative changes, the job market remains in flux. The integration of AI, economic pressures, and policy decisions continue to reshape employment landscapes, leaving many workers facing uncertainty. The long-term effects of these developments will depend on the balance struck between innovation, fiscal responsibility, and the preservation of essential public services.

Lululemon beat Wall Street expectations for fiscal first-quarter earnings Thursday, but cut its full-year earnings guidance, citing a “dynamic macroenvironment.” As the company navigates tariffs and fears about a slowing U.S. economy, CEO Calvin McDonald said in a news release that “we intend to leverage our strong financial position and competitive advantages to play offense, while we continue to invest in the growth opportunities in front of us.”

First-Quarter Earnings and Revenue

He said on a conference call with analysts that he is “not happy” with U.S. growth and said U.S. consumers are being cautious and intentional about their buying decisions. The company reported net income for the fiscal first quarter of $314 million, or $2.60 per share, compared with a net income of $321 million, or $2.54 per share, a year earlier. First-quarter revenue rose to $2.37 billion, up from about $2.21 billion during the same period in 2024.

Comparison to Wall Street Expectations

Here’s how the company did for its first quarter compared with what Wall Street was expecting for the quarter ended May 4:

• Earnings per share: $2.60 vs. $2.58 expected
• Revenue: $2.37 billion vs. $2.36 billion expected

Full-Year Guidance and Tariffs

The company cut its full-year earnings guidance. It expects its full-year earnings per share to be between $14.58 to $14.78. Previously, it expected full-year earnings per share to be in the range of $14.95 to $15.15 for the year. Analysts anticipated earnings per share of $14.89. Chief Financial Officer Meghan Frank added on the call that the brand is planning to take “strategic price increases, looking item by item across our assortment,” to mitigate the effect of tariffs.

Price Increases and Tariff Impacts

“It will be price increases on a small portion of our assortments, and they will be modest in nature,” she said, adding that those hikes will start rolling out toward the second half of the current quarter and into the third quarter. Lululemon’s report comes after a string of retailers reduced or withdrew their guidance and said they would hike prices because of uncertainty surrounding President Donald Trump’s tariff regime.

Market Reaction and Industry Comparison

Shares of the apparel company plunged about 23% in extended trading. Among Lululemon’s rivals in the athleticwear category specifically, Gap, which owns athleisure brand Athleta, reported last week that it expects tariffs to impact its business by $100 million to $150 million. Nike told CNBC last month it would begin raising prices on a wide range of products, though it did not specify whether tariffs were the reason for the hikes.

Outlook and Gross Margin

On Thursday’s earnings call, McDonald acknowledged the uncertainty that tariffs have brought on the business, but said he believes the brand is “better positioned than most” to navigate the current environment. Lululemon expects second-quarter revenue to total between $2.54 billion and $2.56 billion. It also anticipates full-year fiscal 2025 revenue to be $11.15 billion to $11.3 billion — unchanged from its last forecast. Gross margin was 58.3%, ahead of the 57.7% that analysts had expected.

Conclusion

In conclusion, Lululemon’s first-quarter earnings report showed a beat in earnings and revenue, but the company cut its full-year earnings guidance due to the impact of tariffs. The company plans to take strategic price increases to mitigate the effect of tariffs. The market reacted negatively to the news, with shares plunging 23% in extended trading.

FAQs

Q: What were Lululemon’s earnings per share for the first quarter?
A: $2.60 per share.
Q: What was Lululemon’s revenue for the first quarter?
A: $2.37 billion.
Q: Why did Lululemon cut its full-year earnings guidance?
A: Due to the impact of tariffs and a “dynamic macroenvironment”.
Q: What is Lululemon’s plan to mitigate the effect of tariffs?
A: The company plans to take strategic price increases on a small portion of its assortments.
Q: How did the market react to Lululemon’s earnings report?
A: Shares plunged 23% in extended trading.