After 2.5 years of 0% interest rates, $5trn of government stimulus and a payroll tax cut, the US economy is finally beginning to create jobs again. The jobless rate fell last month to 8.8%. And the wider U-6 jobless rate, which includes those unemployed for more than 6 months, fell to 15.7%.
In turn, this helped to boost auto sales last month, as the chart shows. For only the 3rd time since the Crisis began, sales (red line) were over the 1.1m level. They were still well below the 1.4 – 1.6m level seen in March until 2008. But one cheer is better than none at all.
Obviously there was some element of consumers buying ahead of likely price rises, following the Japanese disaster. Shortages of some models are being widely forecast, as parts supply dries up. Thus GM was able to reduce its purchase incentives to the lowest level since its bankruptcy.
Shortages are also more likely, due to a marked shift in consumer buying patterns. High gasoline prices meant sales of compacts are rising. And the ratio of car sales to trucks has reversed with cars now outselling trucks by 53%: 47%, as consumers go for more fuel-efficient vehicles.