Sunday, 18 of February of 2018

Economics. Explained.  

Car and Truck Sales

January 3, 2018

Unit car and truck sales rose 2.1% in December to a 17.76 million pace after having declined 3.4% in November.  A 17.76 million pace is robust but still 1.6% lower than it was at this time last year.  We expect car sales to remain relatively robust for some time to come for a couple of reasons.

First, home sales remain at s solid pace.  Because car and home sales are the two biggest ticket items in a consumers budget, it is not surprising that a change in trend will be evident in these two categories first.  In this case both car and home sales seem pretty solid.

Second, the stock market is at a record high level.  That is an indicator of investor sentiment.  A rising stock market also boosts consumer net worth.

Third, all measures of consumer confidence are at their highest levels thus far in the business cycle.

Fourth, tax cuts to both individual and corporate income tax rates will be forthcoming in 2018.

And, finally, consumers have paid down tons of debt and are now in a position to spend.  Jobs are climbing at a pace of 170 thousand per month.  The unemployment rate has fallen to a level that is below the full employment mark.  Consumers are benefiting from stable and still low gasoline prices. For all of these reasons we look for  2.9% GDP growth in 2018.

Stephen Slifer

NumberNomics

Charleston, SC


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