While other economic indicators are showing signs of fatigue, US auto sales in May – with the country being the world’s second largest auto market – raced to their strongest pace in almost a decade thanks to cheap loans and affordable gasoline.
According to researcher Autodata Corp., the automotive market in May rushed past analyst predictions for a 1.1 percent slide in demand and inched up by 1.6 percent to 1.64 million units. “Memorial Day sales promotions probably were very effective,” commented an AutoTrader analyst. “But there are also so many strong elements in place. There are still old vehicles on the road, gas prices are down, employment is strong and there is plenty of pent-up demand.” The annualized selling rate, adjusted for seasonal trends, has now jumped to 17.8 million, according to Autodata, from 16.7 million the year before and above analyst forecasts for a level of 17.3 million vehicles. The research firm added the rate would be the fastest since July 2005, with average purchase prices still going up last month – Ford reported it was up $2,300 across the line and Fiat Chrysler was selling 3.8 percent higher priced vehicles, according to data from Kelley Blue Book.
But even as the average new-vehicle loan in May reached the highest monthly tally on record, according to Edmunds, data showed new orders for US factory goods was down by 0.4 percent in April, with the federal reserve adding the second-quarter economical growth is now gearing up for a slower than estimated pace.
Via Bloomberg, Reuters