The federal government cash for clunkers program is over, and as the pessimists predicted, the program merely borrowed sales from the future rather than generated sustainable growth.
September’s light-vehicle sales rate will fall to 8.8 million units, consumer auto site Edmunds.com said. That would be the lowest rate in nearly 28 years, tying the worst demand on record.
After the cash-for-clunkers program boosted August sales to their first year-over-year increase since October 2007, demand has plunged. In at least the last 33 years, the U.S. seasonally adjusted annual rate has only dropped as low as 8.8 million units once -- in December 1981 -- with records stretching back to January 1976.
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Minus autos (vehicles and parts), the preliminary retail sales report gives an increase of 1.1% from July 2009. From the current press release:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for August, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $351.4 billion, an increase of 2.7 percent (±0.5%) from the previous month, but 5.3 percent (±0.7%) below August 2008. Total sales for the June through August 2009 period were down 7.6 percent (±0.3%) from the same period a year ago. The June to July 2009 percent change was revised from -0.1 percent (±0.5%)* to -0.2 percent (±0.2%)*.
The U.S. Treasury is reporting the Cash for Clunkers program netted 700,000 auto sales.
Wow, that's a lot of car for 27 days of sales!
Economic benefits of the program will persist in coming months as carmakers replenishing inventories hire and expand production, the White House Council of Economic Advisers said.
The initiative will boost U.S. third-quarter gross domestic product by 0.3 to 0.4 percentage point and create 42,000 jobs by the end of 2009, according to the CEA’s estimate.
I hope this estimate is simply to replenish sold inventory, but still, looks like a success! (for Japan!)
The U.S. government will suspend the popular cash-for-clunkers program after less than four days in business, telling Congress that the plan would burn through its $950-million budget by midnight, several sources told the Free Press.
The Michigan delegation was holding an emergency meeting convened by Rep. John Dingell, D-Dearborn, to discuss their next steps. The U.S. Department of Transportation did not immediately comment on its plans for the program, or what would happen to deals in progress.
The decision to suspend the plan came after auto dealers warned the government today that it was in danger of losing track of how many trades had actually been made.
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