The Effects of Cash for Clunkers
Data source: Federal Reserve Board
Forecast: Mountaintop Economics & Research, Inc.
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The "Cash for Clunkers" program provided a strong boost for sales of autos in the U.S., and this will eventually show up in the auto assemblies data. A more long-term and self-sustaining recovery in the auto industry will not begin until the data for both employment and consumer income start to rebound. This is expected to occur by the middle of 2010. Though the monthly data is currently at the cyclical bottom, annual growth in the total number of autos assembled in the U.S. will be negative in 2009, and only moderately positive in 2010. More robust gains are forecast for 2011 and 2012.
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