Thursday, October 1, 2009

Consumption Up in August, Expect a Decline in September

Peter Boockvar (via The Big Picture) with the latest on personal consumption:

August Personal Income rose 0.2%, 0.1% more than expected and July was revised up by 0.2%. Spending rose 1.3%, 0.2% higher than forecast and most of the gain in the durable goods category was due to the Clunker program. Durable goods purchases, which reflect auto’s, rose 5.3% vs a 1.3% gain in July.

Those personal consumption figures were from August, when auto sales (make that foreign auto sales) snapped back due to the cash for clunkers. How about September? The WSJ answers that question:
Consumer jitters and vehicle shortages returned September U.S. auto sales to depressed levels, as the jolt from the government-run "Cash for Clunkers" subsidy program proved to be short lived.

The closely watched annualized selling rate fell to 9.22 million in September from last month's 14.1 million rate, according to Autodata, an industry consultant.

"I've never seen a rollercoaster ride like this," Ken Czubay, vice president of U.S. sales and marketing at Ford Motor Co. (F) said in a conference call.

Car makers attributed the decline to the overall weak economy and the after-effects of the clunkers program that ended Aug. 24, which allowed consumers to trade in old vehicles for newer more fuel efficient ones.
And the chart (remember that the huge slide began last September, thus the year over year decline is off of an already low base).

Source: BEA / Autoblog

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