Good morning!
Here are today’s highlights:
Is the Trump administration refusing to refund some of its illegal tariffs?
Would banking deregulation unleash innovation or encourage predatory lending?
The shortage of skilled-trade workers continues unabated.
The Economist says the U.S. economy remains the envy of the world—but could be doing even better.
THE AUTO INDUSTRY
One million new-car buyers have vanished: “The U.S. auto industry faces sobering new math: Some one million prospective buyers have defected from the new-car market since the start of the decade—and they aren’t expected back soon. Until recently, auto executives, analysts and economists believed that U.S. new-car sales were on a steady climb back to volumes last seen before the pandemic closed factories and scrambled global supply chains. That’s no longer the case. General Motors, Ford Motor, Toyota, and other automakers have said they are planning for sales of new cars to shrink or stagnate this year after consumers—stung by persistent inflation, rising fuel prices and high interest rates—are balking at prices that have risen to around $50,000 on average.”
“Americans were buying around 17 million cars and trucks a year before 2020; industry analysts don’t expect the market to return to that level until the end of the decade or later. They now forecast total annual sales of about 16 million vehicles or fewer this year, and that outlook has grown even dimmer as the conflict in Iran keeps gas prices high. ‘This is a real threat to the whole industry,’ said Erik Severinson, Volvo’s chief commercial officer, noting the same dynamics are roiling the European auto market. ‘It’s a proof point of something more fundamental which is wrong in the general economy—that people are not able to buy new cars.’”
“‘I don’t want to say automakers are okay with this level of sales, but they kind of are,’ said Ivan Drury, an Edmunds automotive analyst. ‘It’s not like back in the day when they’d be hacking away at the price to lift sales.’ That’s because selling big trucks and SUVs that dominate those automakers’ lineups is more lucrative than selling larger volumes of cheaper cars.”
“‘I don’t think there’s a dealer in this country who would say, I don’t want a more-affordable product to offer,’ said Patrick Manzi, chief economist of the National Automobile Dealers Association. ‘For now, things are going well. But what happens if we hit another recession?’” READ MORE
