Economic Indicators

Used Vehicle Prices Plunge Signaling End Of Auto Party | ZeroHedge.

I was just thinking about this concept while eating my lunch. (BTW, I had an excellent chicken schwarma and Greek salad at Omar’s)

The recession we experienced in 2009 was so extraordinary that the post recovery numbers are not behaving in the way in which we are conditioned.

One example is housing. Yes, housing prices are “up” according to the NAR, but they are “up” from such a low base that the rise is not feeding through and stimulating the economy.

Now, this plunge in used car sales would normally be an indicator of worse things to come in new car sales, but I believe that we have to take the effects of the 2009 recession into consideration. New car sales dropped so much in 2008 and 2009 that there is now a shortage of good used cars that are three or four years old. This is keeping late model used car prices high, so consumers are opting to buy new cars instead.

I think ZH could be onto something here, but I would like to see more data reinforcing this trend.

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