Car sales last month were at the very low end of the normal range.
There’s no sign of consumers suddenly cutting back drastically, so the recession fears can be calmed a bit. But there’s also no sign of exuberance. It’s a bit worse than "ho-hum," but not as bad as "ouch!"
Looking at sales over the past five years, they are pretty much in line with underlying demand. So we have not been overbuying cars the same way that we overbought houses. Neither is there an excess in our driveways, nor pent up demand. I look for slight declines in car sales in the coming months, as the housing decline causes just a bit of slowdown in big-ticket, interest sensitive spending.
Business Strategy Implications: The worst fears of recession are not being validated by the data, so keep on plan for moderate growth. (But no guarantees, so don’t ignore the contingency planning.)