Auto Sector Remains Above Worrying Consumer-Confidence Signals
By Michelle Krebs July 28, 2010After a deep drop in June, the Conference Board, which tracks consumer confidence trends, said July will follow with another decline in consumer confidence.
The trendline is beginning to worry economy watchers, but the automotive sector seems to be staying free of the fallout - at least for now. The Conference Board reported that although the number of consumers with plans to buy a home dropped from 2 percent in June to 1.9 percent in July, those with plans to buy a new vehicle improved to 4.5 percent from June's 4.1 percent.
Marketwatch quoted Lynn Franco, director of the Conference Board's consumer research center, as saying July's consumer-confidence index dropped to 50.4 in July, the lowest level since February. The article also quoted Dan Greenhaus, chief economic strategist at Miller Tebak, with a downcast opinion of the situation.
"July's confidence reading should be closer to 90 than 50, given how long the economy has been recovering," Greenhaus said. "While July provides some measure of stability for this index following an exceptionally large drop in June, by any measure, consumer confidence remains extraordinarily depressed in comparison to previous readings."
July auto sales may provide support for the data from the Confidence Board. June sales declined 10 percent from May, but data from Edmunds.com indicates July is likely to provide a substantial rebound from June's dropoff. Edmunds.com is projecting a Seasonally Adjusted Annualized Rate (SAAR) of about 12 million vehicles.
LEAVE A COMMENT