Automobile sales do not bode well for first-quarter GDP.
U.S. sales of cars manufactured in North America rose 16% between February and March. However, that’s a substantially smaller increase than we’d expect to see this time of year. Sales were down 7.7% compared with March 2007, and that represents a clear acceleration of the steady downward trend we’ve seen over the last five years. The graph below records the sales for each month over the last 5 years so that you can simultaneously see both the seasonals and trends. To make year-over-year comparisons, look across the adjacent columns for any given month.
But the really dramatic deterioration showed up in sales of light trucks, which includes the increasingly less trendy sport-utility vehicles. March sales of domestically manufactured light trucks were down 18.3% relative to March 2007.
Similar patterns were seen in U.S. sales of imported cars and light trucks, with March marking an important milestone: the 668 thousand total U.S. sales of light trucks (imported plus domestic) was less than the 684 thousand cars sold. Meanwhile, sales of the gas-stingy Prius continued to set a new record.
One factor in the plunging SUV sales is doubtless the record price of gasoline. But even more important is the fact that consumer worries about income and job security are leaving them no longer willing to ignore those prices. And falling consumer confidence means that autos are not going to be our only problem.