Auto sales drop back below the 12 million units pace   

Annualized seasonally adjusted U.S. sales of domestic and foreign autos and light trucks totaled 11.753 million in May; breaking a string of seven months in a row over 12 million, and three months over 13 million. Using our 3-month moving average, sales are up 9.8% from the prior year. Sales had been fairly stable between March and September of 2010, but in Q4 sales accelerated, and continued to increase into 2011 until May. Auto sales remain about 30% 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 were the first six months of 2009, when annualized sales averaged 9.621 million. 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.