Soft auto sales a sign that consumers aren't spending
The conundrum since Donald Trump's election is crystalizing. Businesses and consumers both reported a rapid rise in confidence since late last year but neither are spending money.
Rising confidence was once a reliable predictor of spending but with consumers maxed out and businesses wanting to see the money first, the correlation has broken down.
Auto sales are one of the best real-time indicators of spending and while they were expected to cool in 2017, it wasn't supposed to be this much.
- GM sales -5.8% vs -2.0% est
- Fiat Chrysler sales -7% vs -5.9% est
- Nissan sales -1.5% vs +1.5% est
- Toyota sales -4.4% vs -4.2% est
- Ford -7.1% vs -4.7% est
It doesn't seem to be a one-off or anything related to the timing of Easter. Executives at Ford said sales were below expectations all month long.
The drop caught the market off guard with shares of the Big 3 down 4% to 5.7%.