Monday, 22 of April of 2019

Economics. Explained.  

Car and Truck Sales

April 5, 2019

Unit car and truck sales jumped 5.7% higher in March to an annual rate of 17.5 million after having fallen 0.9% in February.  This means that in the last year car sales have risen 1.4%.  Like virtually every other economic indicator, car sales have rebounded from stock market meltdown late last year and the protracted government shutdown.  After falling 20% the stock market has almost fully recovered and stands just 2% below a record high level.

Consumer confidence got hit late last year but it has already recovered much of what it lost.

Confidence will remain solid simply because the economy continues to crank out 190 thousand jobs per month.  Steady growth in jobs means continuing growth in income.  At 3.8% the unemployment rate is close to a 50-year low so almost everyone who wants a job has one.

Driven by the steady jobs gains, real disposable consumer income (what is left after taxes and inflation) is rising at a solid 3.0% pace.

Meanwhile, consumers have paid down tons of debt and are now in a position to spend.  At the same time, mortgage rates have fallen 1.0% to 4.0% in the past couple of months.  For all of these reasons we look for  2.6% GDP growth in 2019 after a 3.0% increase in 2018.  Growth of that magnitude suggests that cars sales will remain healthy for the foreseeable future.

Stephen Slifer

NumberNomics

Charleston, SC


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