What's going on?

Auto sales in the US fell by 7% last month � following a trend of Americans buying less stuff (including fewer homes) as borrowing money becomes more expensive.

What does this mean?

Staple wheels-providers Toyota, Nissan, and Ford all saw their US sales decline by more than 10% in September. Fiat Chrysler was the only major carmaker to gain, as sales of its Jeeps jumped. Prior to this January, auto sales hadn�t fallen in eight years. Higher interest rates are partly to blame � the US Federal Reserve (a.k.a. the Fed) hiked rates last week for the third time this year (with another raise expected before year-end). That means it costs more to borrow money � to buy things like cars and houses � so people buy less.

Sales of US houses have fallen for eight months in a row as mortgage rates climb to the highest since 2011 (tweet this). Even notoriously in-demand Manhattan (where people pay through the nose for not much at all) is feeling the pinch, with home sales falling for four straight quarters.

Why should I care?

For markets: A ripple effect.

Car and home sales are key economic bellwethers (i.e. they indicate overall economic trends) � investors watch them to gauge the health of the world�s largest economy, and they�re looking a little worse for wear. The impact of higher rates could feed through into company profits across the board and, with stocks on a tear, expectations are sky-high. Investors might end up disappointed.

The bigger picture: This is how central banks are meant to work.

The Fed is doing the job it�s supposed to do. Growth forever is unsustainable (it leads to crashes) and, before things get out of control, the Fed�s put a dampener on the economy. By raising rates, money is taken out of the economy � and everything sits down and calms down.