New-Car Sales Continue Strong Pace in July
“July car sales suggest that shoppers are willing to make their car purchases a priority over other goods,” says Edmunds.com Sr. Analyst Michelle Krebs.
But how far would shoppers be willing to go for a great deal? Let's compare how much shoppers are spending on health care and compare that to the amount shoppers are spending on new cars.
Click to enlarge.
The long-term trend is over! First, the exponential trend failed to the upside. Now it is failing to the downside! It can mean only one thing. Although shoppers recently made health care a priority (during the recession), they are finally permanently making new cars a new priority! It's about time! Hurray! Just say no to kidney operations!
Let's look to see just how much below the trend line we are. I'm using a 4-quarter moving average to smooth out the data.
Click to enlarge.
Oh, yes. That's totally sustainable. We're no doubt ushering in a whole new era of U.S. economic prosperity! I have never been quite so optimistic (except perhaps in 2000 and 2006 of course).
Reuters adds, “Monthly [car] sales are regarded as an early indicator of the U.S. economy's health.
In all seriousness, I'm just not sure that conventional wisdom has an accurate understanding of what it could mean. I'm not a well-respected economist with vast credentials, but I would argue that the hangover from binge buying could offer up some serious headaches again at some point. But hey, that's just me.
In related news, let's see if all this new found optimism will translate into more driving to JC Penney and Sears. The following chart shows long-term vehicle miles traveled per capita growth.
Click to enlarge.
Perhaps not.
Why do all the long-term charts I create look so painful? I must be very unlucky. I'll never get a guest spot on CNBC if I can't figure out what I'm doing wrong!
Source Data:
St. Louis Fed: Custom Chart
St. Louis Fed: Vehicle Miles Traveled per Capita Growth
July 19, 2013
ReplyDeleteDOT: Vehicle Miles Driven increased 0.9% in May
With all these factors, it might take several more years before we see a new peak in miles driven.- Calculated Risk
For what it is worth, I shall predict infinite years.
It's similar to my estimate for a new peak in manufacturing jobs. Sigh.
Just opinions!