I can't help thinking I've seen this movie before.
Easy credit spurred lots of consumer buying. In the case of autos, annual sales of 10-12 million vehicle sales became normal. The car companies kept hundreds of thousands working. Then came the middle of last year and the crump of the economy. Car sales, like sales of everything else, fell off a cliff.
This summer;s cash for Clunkers program certainly revived the market. Nearly 700,000 vehicles sold.
Now, when you got past a car dealer's lot, chances are you think to yourself, "Looks like slim pickin's there." That's because it is. Dealer inventories have shrunk. So, it's time to restock.
I worry the companies are acting prematurely. I worry that Clunkers 'pulled forward' a lot of purchases under guise of 'priming the pump' to get retail moving again. But, are you more likely to buy a new car or a dishwasher in September because your neighbor got a good deal on a car in August? Doesn't make sense to me.
nd if I'm right, and the car business does not show strength next month, what are the odds those GM workers get sent back home? And what message will that send?
The economy is all about consumer sentiment, right? It's not getting any better, we learned today.
I'd feel a lot better if car lots don't get jammed and crammed full just yet.