I thought the Obamanistas said auto sales had recovered. GM is about to do an IPO. Things are great. How could auto sales be at a 28 year low? You mean consumers aren’t buying cars when you don’t pay them to buy cars? They sold lots of cars when the government subsidized the purchases. Of course, poor people got screwed because used car prices soared by 15% because of a shortage caused by Cash for Clunkers.
Back to school sales suck? Tell me it ain’t so. I was in Kohl’s on Sunday morning. They were having a huge sale and it was a week before school starts. There were 5 customers in the entire store. The MSM will continue to be surprised as consumers don’t spend money they don’t have.
U.S. Auto Sales May Hit 28-Year Low as Discounts Flop
Industrywide deliveries, to be released tomorrow, may have reached an annualized rate of 11.6 million vehicles this month, the average of eight analysts’ estimates compiled by Bloomberg. That would be the slowest August since 1982, according to researcher Ward’s AutoInfoBank. The rate would be 18 percent below last year’s 14.2 million pace, when the U.S. government’s “cash for clunkers” incentive program boosted sales.
“Home sales are way down, the stock market is way down, the unemployment report is very disappointing and consumer confidence is sputtering,” Jesse Toprak, vice president of industry trends at TrueCar.com, said in an interview. “People just don’t want to make big-ticket purchases because they’re uncertain about their jobs and the value of their homes.”
While automakers increased discounts by 1 percent from July to an average of $2,864 per vehicle, sales to individuals probably fell 7 percent from last month, according to Santa Monica, California-based TrueCar.
Consumers are avoiding showrooms as fear of a double-dip recession grows following the 27 percent plunge in existing home sales in July, said Mike Wall, an analyst for IHS Automotive. The U.S. unemployment rate in July held at 9.5 percent, near a 26-year high of 10.1 percent. The Conference Board’s consumer sentiment index, due to be reported today, was little-changed this month at 50.9 after 50.4 in July, according to the median forecast in a Bloomberg survey.
“When you’ve got that sentiment, that fear hanging over the market, it makes it a tough sell for consumers” to spend $25,000 or more on a vehicle, said Wall, who is based in Grand Rapids, Michigan.
Back-To-School Sales Falter
The back-to-school sales period should be completed within two weeks. New data show that the season failed to produce better results than last year and may even have been worse. “Americans’ self-reported spending in stores, restaurants, gas stations, and online averaged $61 per day during the week ending Aug. 29. So far, August and back-to-school 2010 spending trends appear no better than those of August 2009,” according to Gallup. The number is down from $66 in July.
The research firm makes the pessimistic observation that the “new normal” of spending may have dropped to range of $59 to $67 a month, which is hardly enough to jumpstart or maintain a recovery.
The research obviously adds to the data that show that the economy is not picking up and that there may be another retail sales disaster this holiday similar to the only that occurred two years ago. That 2008 holiday period was weak enough to cause thousands of store closings and tens of thousands of layoffs in the sector. That, in turn, helped put the economy deeper into recession in early 2009.
It is often observed that consumer spending is 65% of GDP. The Administration has hoped to replace some of that with income from exports. That can only be a reality of other parts of the world post substantial