Watch this video with Chief Economist Jonathan Smoke from his home studio in Atlanta, GA, as he explains the impact of COVID-19 on the automotive industry. Jonathan examines: Economic forecast and impact in the second quarter Consumer sentiment and buying behaviors Stock market, interest rates, and employment Current view of new and used retail sales … Continued
Much has changed since the first week of March. COVID-19 cases keep getting worse and will lead to a substantial economic contraction in the second quarter. The rest of the year could see some recovery, but it is too early now to call. There is some hope on the horizon with drug trials for treatments … Continued
We have near real-time views of sales and prices, but a lagged view of tax refunds. The latest data reveal that the used-vehicle market achieved liftoff last week. Through Friday, February 28, tax returns filed with the IRS were up slightly (0.1%), but the number of refunds was down 1.9%. The average refund was also … Continued
All of the new economic and market data reported last week covered February or January. The February metrics are positive – strong job creation, strong new and used retail sales – but reflect an economy and auto market before concerns about the coronavirus began mounting. Stock, bonds volatile: Stock indices saw extreme volatility this week … Continued
The IRS caught up with statistics on tax filings and refunds through Friday, February 21. As of then, tax returns filed with the IRS were down slightly (0.1%), but the number of refunds was down 2.9%. The average refund was also down (0.6%). We were a bit more than a third of the way through … Continued
The coronavirus captured most of last week’s headlines. The situation remains dynamic, and the future is uncertain. It is unclear how it will impact the U.S. economy and auto market. If the U.S. does not see a severe outbreak leading to U.S. travel restrictions and quarantines like China, South Korea, Japan and Italy have seen, … Continued
Tax refunds drive the demand that makes the spring season the most important season of the year for the used-vehicle market. This is week 9 of the year, which is when we expect to see a jump in used retail sales. Week 9 should correspond to when about half of tax refunds have been distributed … Continued
Housing continues to support growth in the U.S. economy, and consumer credit continues to flow as the Federal Reserve suggests interest rates will remain stable. Housing strong: With mortgage rates again approaching all-time lows, demand for housing is high, but supply is tight. Existing homes are appreciating much more than normal, which encourages more new … Continued
We continue to expect this year to be “not so bad” for the industry and especially for dealers as a modest decline in new retail sales will be offset by the gain in used retail sales. Consumer spending slowing: Consumer sentiment is stronger so far this year despite modestly higher prices and slowing real wage … Continued
The year of wild cards continued last week, with the chaos and long delay for results in the first presidential election primary in Iowa. One wild card was taken off the table when the impeachment trial ended with an acquittal for President Trump on both charges. The coronavirus is still spreading, but the stock market has been … Continued