Although U.S. auto sales have received a lot of credit for the relatively positive economic spin out there, those sales are slowing down, warn analysts. Last month, auto sales rose nine percent thanks to high unemployment and weak consumer confidence and disappointed many investors in all areas of the market as a result. Edmunds.com had predicted a jump of 10.2 percent, so nine percent was disappointing and led to some confusion and concern on the part of investors in the market. “Perhaps there was an overestimation of consumers’ willingness to spend money,” speculated analyst Jesse Toprak, while economist George Magliano warned that “it’s the economy. There’s no way around it”.
Interestingly, truck buyers seem to be the most optimistic auto consumers in today’s market, with pickup truck venders hoping that a housing recovery, however fleeting, might spur sales of pickup trucks. Edmunds.com analyst Jessica Caldwell was also extremely optimistic, saying that she believed “easier credit and low interest rates will help boost auto sales in August and the coming months.” However, with European auto sales lagging and unlikely to recover anytime soon, those numbers will have to be outstanding to offset weak sales overseas.
Do you think that the auto industry can continue to drag the U.S. economy along?
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Category: Financial Markets