July 1, 2021

Unit car and truck sales fell 9.4% in June to a 15.4 million pace after declining 9.5% in May.  It is important to remember that the March and April spike in sales was due in large part to the $1,400 tax refund checks associated with the $1.9 trillion fiscal stimulus package passed in March..  So some of the declines registered in May and June reflect car sales dropping back to a more normal pace.  However, it is also true that the widely-discussed chip shortages are curtailing the manufacturers ability to produce.  Many respondents to the Institute of Supply Management’s monthly survey of manufacturing firms cite shortages of critical electronic components as their biggest challenge.  These shortages are to last throughout the third quarter and, perhaps, into the fourth quarter as well.

We expect GDP growth of 10.0% in Q2, and 8.0% growth for 2021 as a whole.

Stephen Slifer

NumberNomics

Charleston, SC