We’re seeing some very weak auto sales from each of the big automakers this afternoon. This is a sure sign that the U.S. consumer remains very weak and that the economy is still on very poor footing without government stimulus. The AP reports:
Automakers got a big lift in July and August from the government’s Cash for Clunkers program, which spurred sales of nearly 700,000 new cars and trucks. The program’s big discounts lured in many customers who otherwise would have waited until later in the year to walk into dealerships.
Now automakers are starting to feel the effect. GM said its sales plunged 45 percent to 155,679 vehicles last month compared with 282,806 in September of last year. Ford reported sales of 114,241 in September, but the decline followed two straight months of rising sales. Chrysler sold only 62,197 vehicles last month, down 42 percent from the prior year.
Japan’s Toyota Motor Corp. said sales fell 13 percent while Nissan Motor Co. said its sales fell 7 percent. Ford Motor Co. had the smallest decline among major manufacturers, falling 5.1 percent.
How long will the government prop up the fledgling economy before they realize that deleveraging is a natural process of economic healing? As for now, we’re just throwing money down a hole while prolonging the inevitable boom/bust strategy that the Fed keeps implementing.