The GDPNow forecast for the 4th quarter surged today to 3.1%, largely on the strength of auto data, and we all know auto sales are doing amazingly well.
https://mishtalk.com/2016/11/04/gdpnow-4th-quarter-estimate-surges-to-3-1-on-strength-in-autos/
But wait, why are auto sales doing so well? Maybe it is the fairly massive inventory build? Could it be the incredible incentives being offered? Perhaps the 0% interest 0% down offers? Perhaps the 72 month loans to anyone who can fog a mirror? Does this sound a tad like housing did 8 years ago? You decide, but in doing so you might want to take a glance at some data on repossessions - that with modern tech are quite easy to do as they can track your car's location and open it easily.
http://www.zerohedge.com/news/2016-11-02/more-signs-strong-us-consumer-emerge-auto-repossessions-soar
Whether the auto industry continues or not, I am going to make a forecast, just like last quarter, that the GDPNow number for the 4th quarter in three months will be half of what it is today.
Friday, November 4, 2016
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