Car Sales Shift Into High Gear, 4-Year High in Feb.
For the second month in a row, U.S. auto sales came in much higher than the consensus expected in February and reached a four-year high of 15.1 million units at a seasonally-adjusted annual rate (see chart above). Despite higher gas prices, total February light vehicle sales came in an impressive 15.7% above a year earlier, led by a 40.4% increase for Chrysler and 34% increase for Volkswagen. Sales of the Ford Focus doubled over the last year, and the company overall had a 14.4% increase. GM highlights included a 28% year-over-year sales increase for the Chevrolet Silverado truck and a 20% annual gain for the GMC Sierra truck.
The last time U.S. monthly sales surpassed 15 million vehicles was in February 2008, as the recession was just beginning. A Reuters report cites rising consumer confidence, upbeat U.S. economic data, pent-up demand and greater availability of credit for the higher-than-expected jump in February car sales.
The last time U.S. monthly sales surpassed 15 million vehicles was in February 2008, as the recession was just beginning. A Reuters report cites rising consumer confidence, upbeat U.S. economic data, pent-up demand and greater availability of credit for the higher-than-expected jump in February car sales.
18 Comments:
Isn't it amazing what happens when you flood the system with liquidity and can get very low cost financing? That said, the car companies are stuffing the inventory channel and have to offer excellent prices in order to move cars sitting on dealer lot.
Zero Hedge shows the GM dealers are carrying 73% more vehicles on their lot than they were in December 2009.
Of course, this story is just more nonsense. Having people dump old vehicles that are too expensive to maintain and operate is fine but not when they are going heavily into debt to buy depreciating assets that they cannot afford. And with all of the favourable factors like money printing, the age of the fleet, etc., sales are still well below the peak. Like the housing starts data the vehicle sales may indicate little more than good weather that allowed more activity than usual during a period that was supposed to be cold and snowy.
Zerohedge is full of you-know-what. Typical of their tactics is to make something look bad that really isn't. To wit: Those rising GM inventories. What Zerohedge conveniently fails to inform anyone is that inventory rise still resulted in a days-of-inventory DROP from 89 to 80 from January to February. That's less than 3 months' supply, and is not particularly unusual. Zerohedge shows a rising chart and spins it to make it sound bad, but conveniently provides no context whatsoever. And their gullible readers mop it up completely undiscerning because it feeds their hopes for gloom and doom or sounds like a nice conspiracy theory.
Vange-
You are becoming hysterical.
Economies have ups and downs, and ours has going back to the Roaring 20s followed by the Great Depression (and, of course before that).
No recession lasts forever; the good times never last indefinitely. At every top, the carnival-barkers are telling you to buy, buy, buy; and in every recession the doomsters are preaching the end of the world, chanting about gold or guns in the basement.
But in general, life and economies get better over time---that has been the story of the last 200 years.
I wish I could see the next 100 years. We may see the end to global poverty, and batteries that power cars, and clean water and air and prosperity.
The only poor will be those who are truly lazy or disabled, or those living to totally corrupt monkey-thug states.
Just recently, Burma has entered the fold of civilized nations. Almost certainly, it will begin to flourish, along with Vietnam and Thailand.
The best is yet to come.
one of the few times in history when the economy coming back elicits disappointment and disbelief!
BTW, speaking of that Zerohedge article on GM inventories, check out the poor "Max Fischer" guy in the comments. He's the only one trying to actually *explain* the reasons behind the increased GM inventory, but the gloom-and-doomers who habitate Zerohedge simply refuse to buy it.
LINK
But the durable goods orders number was low.
Was it low in spite of cars? Or are cars not included in that?
Shipments of transportation goods rose 5.4% in January:
LINK
Depending on locale and timing during the month, those would be the vehicles arriving on dealer's lots probably mostly in February.
"And that bad news can be intoxicating and addicting. They call it "pessimism porn.""...
But is there a streak of reality through all that 'porn Professor Mark?
"What Zerohedge conveniently fails to inform anyone is that inventory rise still resulted in a days-of-inventory DROP from 89 to 80 from January to February"...
Actually unknown if one is a consistent reader of Zer0Hedge one would've also seen articles and commentaries on that drop also...
That's the attractiveness of Zer0Hedge, they have people (mostly under the pseudonym of Tyler Durden), they have articles on both sides...
From Wall St 24/7: Toyota Prius Sales Surge
Sales of all models of the car were up 52% last month. Gas prices seem to have tipped the scale to high-mileage car demand. And so the remarkable history of the Prius continues.
kmg-
the autos were the one bright spot in the durables.
computers and machinery were both down 10%.
a lot of this may have had to do with demand getting pulled from q1 to q4.
the favorable depreciation tax treatment of capital equipment over 1 year ended in 2011 so a lot of folks pulled purchases ahead to take advantage.
durables were the major driver of q4 gdp (well, that and a very low deflator which i think was very questionable).
absent the tax tailwind, it will be interesting to see how they fare in q1. jan was still up yoy, but far less than previous months.
we're really going to need a few more datapoints to get a valid trend though.
and as every empire peaks, there is a guy saying "But in general, life and economies get better over time---that has been the story of the last 200 years."
i'm sure the romans, greeks, etc all felt he same way.
what brings empires down is nearly always fiscal profligacy.
western government have been borrowing from the future for so long that it seems like business as usual and we have lost the appropriate fear of/distaste for it.
but, just like a drunk who says "it hasn't hurt me yet", over time, it will. do it long enough, and it becomes when, not if. a liver can only take so much.
One other thing of note:
This was the 3rd best January-to-February gain on record.
This was the 3rd best January-to-February gain on record.
Look at the weather. February was very warm in the Northeast and warmer than average across the northern states. As such, you expected the 'seasonally adjusted' numbers to come out great. After all, the seasonal adjustment was supposed to ensure that the cold weather and showy conditions are accounted for. Well, when there is no cold weather and no snow I don't see why we should take the 'adjusted' numbers as valid. And let us keep in mind that the manufacturers are desperate to clear inventories that they were building up.
To show what I mean take a look at the latest GM announcement.
While you could argue that the layoffs are temporary it seems clear that the recovery is not what the media is saying it is. After all, we have seen P&R, IBM, Kodak, Sears, American Airlines,Fuller Brush, ADM, and the Post Office announce significant job cuts in the past few months and as we saw, the good jobs report came from 'adjustments' that papered over the new low in the participation rate.
I find Mark's optimism very amusing and wonder just how long it will be before he figures out that a 'recovery' that is based on the Fed buying impaired bank paper at par and flooding the system with money and credit is not sustainable or real.
1300 Obama_bots get a 5 week vacation?
Excessive inventories of coal powered go-karts is the reason given...
juandos: "1300 Obama_bots get a 5 week vacation?
Excessive inventories of coal powered go-karts is the reason given..."
That's funny. The car of the future, and dumb consumers don't even know enough to buy them.
"That's funny. The car of the future, and dumb consumers don't even know enough to buy them"...
That's the thing ron h where do people think the electricity comes from?
I was at friend's house for dinner last night and they have one dim-witted daughter (out of three) who's into her 2nd year master's program in some field of education...
The poor, old dunce just couldn't figure out why we needed coal for electricity generation regardless of how it was explained to her...
Her youngest sister who's a junior in college (double major - physics & applied math) tried explaining energy density to her older sister and and just gave up...
Why am I bothered by all this? Well when the dim-wit finally gets her post grad degree she'll be in some school system making choices for children's education and probably will end up dumbing those kids down to her level...
juandos: "Why am I bothered by all this? Well when the dim-wit finally gets her post grad degree she'll be in some school system making choices for children's education and probably will end up dumbing those kids down to her level..."
Maybe it's not as bad as you think. Kids are pretty perceptive, and they will quickly figure out that she's stupid, and doesn't know what she's talking about, so they won't be fooled.
On the other hand, if she was smart, she could do a lot of damage.
We can hope anyway.
I'm making sure my 10 year old grandson gets a proper education despite what he hears in school, and I make a point of informing his teachers that only a small part of his education happens at school, and that he gets most of it from me.
During some discussion in class last week that involved the subject of taxes, he informed his teacher that "taxation is theft".
juandos
My grandson was the only kid in his 3rd grade class who knew how to operate a cordless drill, so he got that job - under my supervision - for a class project that required drilling holes in a piece of plywood.
His classmates were impressed.
"My grandson was the only kid in his 3rd grade class who knew how to operate a cordless drill..."...
Excellent ron h!
Nothing like a little hands on experience to enhance the learning of common sense...
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