USA: downturn has begun
There are real signs that the boom in vehicle sales and production in the US is finally coming to an end. In the face of higher interest rates and a slowing economy, demand is cooling. For the first time in almost two years, sales of cars and light trucks in the US dipped - year-on-year- in May. US car and truck sales were around 2% down on the same month of last year (when adjusted for different numbers of reporting days). The last monthly decline was in August 1998. This could herald the beginning of the end of the boom to vehicle sales that has accompanied strong US economic growth in recent years. The monthly decline is seen as evidence that higher interest rates, coupled to higher fuel costs, are finally impacting demand. Other industries are also reporting slower activity in response to the efforts of the Federal Reserve Board to dampen consumer spending. It should be noted, however, that sales in May of last year were exceptionally high and the market is still running at a historically high level. May sales work out at an annualised rate of over 17 million vehicles - a significant slowing on previous months when the annualised trend peaked at 18 million units.
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