Jim Hamilton on Auto Sales
Jim Hamilton analyzes the auto industry. His first and last words, with all the graphs and analysis in between omitted, are:
Auto sales down in April, by James Hamilton: The number of new cars and light trucks sold in America was down nearly 8% in April relative to the previous year. That's a significant deterioration of the recent downward trend, but not yet a catastrophic plunge. ...
I conclude that so far this is not looking like a replay of the very sharp drop in domestic auto sales that we saw in the fall of 2005, which ... shaved a full 1% off 2005:Q4 GDP growth. Although rising gas prices may have been a factor in the April sluggishness, I agree with Kash Mansori that the current data are more likely to be an early signal that slowing income growth and a perhaps a reduction in mortgage equity withdrawal are starting to show up in consumption spending.
So far, the magnitudes are ones we can live with. And it's always a mistake to make too much of one month's data. But the April vehicle sales certainly raise the level of concern.
Posted by Mark Thoma on Thursday, May 3, 2007 at 10:22 PM in Economics, Monetary Policy |
You can follow this conversation by subscribing to the comment feed for this post.