This is not just another bad sales month.
July seasonally unadjusted sales of cars manufactured in North America were down 14% from the previous July and down 17% from July 2004.
Domestic light truck sales were down 13% year-to-year and 23% over four years.
High gasoline prices often hurt sales of domestics relative to imports, but a weak overall economy would bring down both. The recent trend of rising import sales was reversed in July for both cars and light trucks:
The Wall Street Journal reported that July auto sales overall were the worst in 9 years.
Putting this together with what I read as a distinct turn for the worse in a housing downturn that has become longer and deeper than I would have expected for a “soft landing” leads me to repeat my suggestion that it is time to move the fed funds target back to 5%.