Industrywide sales of cars and light trucks for domestically-produced vehicles are expected to have run at a 12.2 million annual rate in November, and overall sales are expected to have run at a 16.0 million pace, down from 16.1 million in October. If the consensus forecast is realized, November would mark the slowest pace of the year, at 0.7 million below the five-year average.
Weakness in automobile sales is impacting industrial production, which
in October fell 0.5%, a large decline for this data series. A turn in
the production cycle ranks near the top of the list of potential dangers
for the U.S. economy, as cutbacks in production would lead to weakness
in the growth of personal income, hence resulting in a vicious cycle of
decreases in production, income, and spending.
Bearish for the outlook on automobile sales was recent data on consumer-purchasing plans, which, in the Conference Board's most recent survey, indicated that the percentage of respondents planning to buy a car within the next six months fell to 4.7%, just a tenth of a percentage point above a 40-year low.
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Tony Crescenzi Blog Hidden Weakness in the ISM Index 12/3/2007 10:50 AM EST This is another indicator that recession is looming.
Tony Crescenzi Blog Bernanke Said to Watch the Data 12/3/2007 9:40 AM EST The Fed chairman placed an emphasis on the reports to be released before the Dec. 11 meeting.
At the time of publication, Crescenzi was long Ford.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
TheStreet.com has a revenue-sharing relationship with Trader's Library under which it receives a portion of the revenue from purchases by customers directed there from TheStreet.com.
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