No signs of life for auto sales   

Annualized seasonally adjusted U.S. sales of domestic and foreign autos and light trucks totaled 11.439 million in August; a small decline from July. Sales fell from 14.1 million in August of 2009, which was the height of cash for clunkers sales. Even using our more stable 3-month moving average, sales were off 3.1 percent from the prior year. This is the first decrease in year-over-year sales since November 2009. Sales have remained fairly stable between March and August of this year. Auto sales remain 32% below the average annual sales of 16.7 million from January of 2001 to December of 2007, before sales started to decline in 2008. The low point for sales was the first six months of 2009, when annualized sales averaged 9.621 million as potential buyers tightened their belts and waited for the July launch date of the federal cash for clunkers program. Upon expiration of the handout, sales dropped back below 10 million and have slowly regained some of the lost ground since then. It is clear from the data that the $3 billion cash for clunkers program did nothing but reward people for buying cars later or earlier than they had already planned. Our graph shows a 3-month moving average of seasonally adjusted annual rates to smooth out some of the month-to-month volatility.