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Automobile sales record strong gains

December auto sales continued to register impressive gains, rising at a 17% annual rate since hitting bottom early last year; moreover, sales are up at a very impressive 25% annual rate in the past six months. December sales beat estimates by 1.9%. Although the pace of sales is still low from an historical perspective, the recovery to date has been very impressive. This is a strong vote of confidence in an ongoing recovery, and a sign that consumers are in better shape than is commonly thought, given the still-high level of unemployment. The fact that sales have been exceeding expectations for some time now, without the help of government subsidies, means that there will undoubtedly be ripple effects throughout the economy as production targets ramp up to meet unexpectedly strong demand. What's good for General Motors, as they say, is good for the economy. Unquestionably bullish.

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