 | Auto Sales Not Signaling Double Dip |
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Cars and light trucks were sold at an 11.5 million annual rate in August, according to Autodata Corporation, essentially unchanged from July and in-line with consensus expectations. This supports our view that real (inflation-adjusted) consumer spending is growing at a 1.5% to 2% annual rate in Q3, which is not consistent with a double-dip recession.
Some news outlets are looking at August sales and noting, correctly, that sales are the lowest for August since 1982. While completely accurate, this presents a highly misleading story of what's going on in the autos sector. From January through July, every month this year had higher auto sales than the same month in 2009. Overall, sales in the first seven months of 2010 were 14.6% higher than the same period in 2009, which is an extremely vigorous recovery.
However, last August autos were sold at a 14.2 million annual rate, well above any other month in 2009, as the cash-for-clunkers program was set to expire and anyone with a "clunker" in their garage, driveway, or in their yard had a huge $4,000 incentive to buy a new vehicle. Were it not for the program, auto sales this August surely would have been higher than in August 2009.
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