U.S. Total Vehicle Sales
Chart of the Week for June 26 - July 2, 2009
The chart above illustrates total vehicle sales in terms of millions of units of cars and light trucks sold in the United States from January 2000 to May 2009. Each data point represents annualized sales for the given month.
It is clear from the chart that auto sales in the United States have declined precipitously in the last eighteen months. In November 2007, when the current economic contraction officially began, U.S. auto sales stood at 16.1 million units, already down from the time period high of 21.8 million units reached in October 2001. From November 2007 to the end of May 2009, sales have fallen 39% to 9.9 million units. One may assume that sales of cars and other "big ticket" items might fall during a recession because of rising unemployment, declining household wealth, and lack of credit availability. However, it is interesting to note that during the last economic contraction (March 2001-November 2001), U.S. auto sales remained stable and even spiked up dramatically toward the tail end of the contraction.
A recent survey by the Conference Board suggests that plans to buy a new car are at their highest level in over a year. It is unclear whether these good intentions will lead to increased auto sales, since access to financing for car loans remains constricted. The federal government has attempted to intervene using various fiscal and monetary policies in order to unlock credit and encourage consumer spending. For example, Congress recently enacted the "cash-for-clunkers" bill, which is designed to incent new car purchases by offering monetary vouchers to consumers who trade in their vehicles for new and more fuel-efficient cars.
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