Cars can fuel the recovery
The auto industry has seen some pretty solid growth, and we should all hope that trend continues.
Neal E. BoudetteThe Wall Street Journal
Automobiles might be the key to our recovery, said Neal E. Boudette. Car sales have had a particularly strong run the past few years, “especially in view of the tepid recovery in other sectors of the economy.” As a result, the auto industry, which “directly employs 2.5 million people,” has seen some pretty solid growth, and we should all hope that trend continues. Though car production makes up just 4 percent of U.S. gross domestic product, it accounted for half of the economy’s growth in the first quarter, according to the Bureau of Economic Analysis. Some of the growth stems from customers who come in for new cars “in hopes of lowering their monthly payment.” The housing recovery has been particularly good for the auto industry, because it boosts consumer confidence and spending and “spurs contractors, plumbers, and electricians to go out and buy new pickup trucks.” But there are some troubling clouds on the horizon. Millennials, who are struggling to find jobs and are often weighed down by student loans, aren’t showing up in auto showrooms, and neither are workers who earn less than $50,000, among others. Until they join in the buying spree, “the auto sector won’t shift into overdrive.”