Automotive Dealer's Weekly Update 7/20/23
The Automotive Advisor Team
Economy SOURCE
Squeezed by painfully high prices for two years, Americans have gained some much-needed relief with inflation reaching its lowest point since early 2021 — 3% in June compared with a year earlier — thanks partly to easing gasoline prices, airline fares, used cars, and groceries.
The inflation figure the government reported Wednesday was down from 4% in May, though still above the Federal Reserve’s 2% target. From May to June, overall prices rose 0.2%, up from just 0.1% in the previous month but still comparatively mild.
Wednesday’s inflation data showed price increases fell back to 2% without causing a spike in unemployment or a deep recession. Last week, the government reported solid hiring in June compared with earlier this year. The unemployment moved ticked lower, from 3.7% to 3.6%, near a half-century low. All of which is good news for our economy and our retail outlook.
New Car Outlook
Since the pandemic struck three years ago, the average new vehicle has rocketed 24% to nearly $48,000 as of April, according to Edmunds.com. Typical loan rates on new-car purchases have ballooned to 7%, a consequence of the Federal Reserve’s aggressive streak of interest rate hikes to fight inflation. It’s all pushed the national average monthly auto loan payment to $729. Affordability will continue to be an issue for some time and deal-making with OEMs getting involved is on the rise.
Used Car Outlook: READ More Here.