Experts say U.S. car sales have dropped to ‘recessionary levels’
Inflation, high gas prices continue to pummel economy.
Sales rates of new cars in the United States have reportedly dropped to levels associated with economic recessions, a dire warning from experts as the U.S. economy continues to get pummeled by inflation, supply chain crises and other issues.
Analysts with the New York-based RBC Capital Markets told MarketWatch this week that “the May U.S. light-vehicle seasonally adjusted annualized rate of sales came in at 12.8 million vehicles, below RBC’s forecast of 13.4 million vehicles and down from April’s 14.6 million.”
“We have not yet seen any evidence of demand destruction,” analyst Joseph Spak told the publication. “But, if a recession were to occur, it’s likely that ‘recessionary’ levels of demand are in the (12 million to 13 million) range.”
Car manufacturers have been struggling to meet demand over the past year and a half due to major ongoing supply chain crises and supply shortages, particularly in the area of semiconductor chips.
High gas prices have also dampened economic activity surrounding cars, particularly as the warmer summer months approach and car usage and travel is traditionally expected to pick up.