August new-vehicle retail sales declined sharply during the second half of the month in spite of earlier claims by auto company sales executives and the consulting organizations serving them of cautious optimism.
Hurricane Irene only added to ongoing auto sales woes – key to the U.S. economy – as consumer confidence declined yet again. Housing prices also dropped and not only the ones under water; the Federal government admitted, finally, that real GDP growth for the first half of 2011 was less than 1%; while Federal Reserve Board meeting notes showed that the governors were at a loss as to what to do next to stimulate a stalled economy.
All this discouraging news was added while long term unemployment continued at post Depression highs – more than 14 million people officially out of work, the real number is millions upon millions higher – and a politically deadlocked Congress went on a taxpayer financed vacation with no ideas in sight to create jobs, other than the posturing necessary to preserve their jobs in the fall of 2012.
It’s a wonder anyone bought a new vehicle at all.
The August retail seasonally adjusted annualized rate (SAAR) for vehicle sales is now expected to come in at only 9.7 million units, which is an improvement from July’s 9.5 million unit SAAR, but down from the 9.9 million units predicted less than two weeks ago by J.D. Power and Associates, among other forecasters. So you can write off another month in the quest for remains a badly needed auto industry rebound, which will spur overall economic growth and increase tax revenues.
The total the light-vehicle selling rate is expected to be 11.9 million units, a decline from July’s 12.2 million units as a result of a weaker fleet mix; also down from the 12.1 million vehicles predicted 13 days ago.
“Marketing and incentive focus has already shifted to September with the upcoming Labor Day weekend, so with improved inventory, the sales pace could show marked improvement next month,” claimed Jeff Schuster, executive director of global forecasting at J.D. Power and Associates.
Well? We will see tomorrow when actual sales numbers are reported where we stand. And we will reassess later in September, after Congress returns to full time election politicking, what effect this has on consumers, whose spending comprises more than two-thirds of our sagging gross domestic product.
One thing appears certain, Ford Motor’s insistence that the year will come in at 13.5 million vehicles, repeatedly made for the past several months in the face of continued bad news, will require some, er, adjustment. (See August New Vehicle Sales Barely Up. U.S. Economy Still Stalled and Ron Bloom Resigns as Assistant to the President for Manufacturing Policy. Was Key Player in Auto Bailouts and – if you can stomach it – CBO Says 2011 U.S. Budget Deficit Third Highest in History)
