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Thursday, October 27, 2011

Strong Auto Sales growth seen in October

by Calculated Risk on 10/27/2011 08:50:00 PM

It looks like auto sales are fairly strong in October ...

From October Auto Sales Forecast: Momentum Is Strong, But it May be a Bubble

An estimated 1,033,257 new cars will be sold in October, for a projected Seasonally Adjusted Annual Rate (SAAR) of 13.4 million units, forecasts ... This sales pace would mark the highest monthly SAAR since August 2009, when sales were inflated by the Cash for Clunkers program. analysts attribute October’s sales results to the release of pent-up demand that has been building for more than a year. As a result, the auto industry may be in the midst of a small sales bubble.

“October’s sales numbers are certainly a bright spot in a sluggish economy, but it would be a mistake to believe that this momentum is the ‘new normal,’ said Jessica Caldwell, senior analyst at “Unless early holiday incentives inspire droves of buyers in November, we don’t expect sales to increase on the same trajectory as we have seen in the last two months.”
From New Vehicle Sales Expected to Reach Highest SAAR Since August 2009 According to
For October 2011, new light vehicle sales in the U.S. (including fleet) is expected to be 1,035,042 units, up 9.0 percent from October 2010 and down 1.7 percent from September 2011 (on an unadjusted basis)

The October 2011 forecast translates into a Seasonally Adjusted Annualized Rate (SAAR) of 13.4 million new car sales, up from 13.1 million in September 2011 and up from 12.2 million in October 2010.
Vehicle SalesClick on graph for larger image.

Sales in Q3 were up slightly from Q2, although - as part of the Q3 GDP release - the BEA estimated motor vehicles and parts made a small negative contribution to GDP in Q3 (probably due to mix of vehicles).

If sales are at this forecast for October - and just hold this level in November and December - vehicle sales will make a strong contribution to Q4 GDP.