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Auto sales still rebounding nicely

Auto sales were a little weaker than expected in January (Toyota's massive recall was a big factor), but they are still up at a 17% annualized rate from their low of last February. With the U.S. car fleet aging steadily, a sales rate this low (by far the lowest level relative to the size of the population since records were first kept beginning in 1967) is very unlikely to be sustained for much longer, especially if the economy as a whole continues to expand. From my perspective it looks like auto sales are following their typical pattern of rebounding after the end of a recession, and could even enjoy a very strong rebound in the years to come. Even from a pessimist's standpoint, it's clear that autos stopped being a drag on the economy about one year ago.

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