August 2015 car sales could have been stunted by the roller coaster known as the stock market, but that hasn't happened.
Edmunds.com analysts predict that
1,538,958 new cars
and trucks were sold in the U.S. in August for an estimated Seasonally Adjusted Annual Rate (SAAR) of 17.4 million. The projected sales will be a 2.1 percent increase from July 2015, but a 2.8 percent decrease from August 2014.
That year over year decrease is easily explained: Last year, Labor Day weekend fell in August.
Edmunds.com also estimates that an estimated 3.22 million used cars will be sold in August, for a SAAR of 36.8 million (compared to 3.24 million – or a SAAR of 37.1 million – used car sales in July).
Is it common for car sales to go seemingly unaffected by fluctuations in the stock market?
Edmunds.com's Chief Economist Lacey Plache, PhD, says,
"Any time you evaluate how an economic event will impact car sales, you need to look at three key elements driving sales:"
- Personal income. As long as people have jobs this will not be a problem
- Access to Credit. We've seen no evidence yet of contraction of lending, and events like today make it more likely that interest rates will remain low
- Confidence. This is the big question mark for the moment. When everyday consumers see the stock market fall like this it will make them nervous. Uncertainty can be a powerful trigger to make the other dominoes fall. But if consumers take a deep breath and see how well other aspects of the economy are performing, it should be enough to maintain calm.
Recent turbulence in the stock market is something to keep an eye on, but it's not an excessive cause for concern with car sales, since many of the other economic fundamentals - such as employment and home prices - remain strong.
This is very far from the 2008 scenario because our economy is much stronger as a whole than it was in 2008. This might have been a necessary market correction on Wall Street, but it's not yet a foregone conclusion that it will ripple out to other areas of economy."