CNBC’s Power Lunch brings breaking news from Phil Lebeau:
“We’re comparing what may be the slowest month since the early ’80s with February of last year. Ford sales down 46.3%. Unadjusted down more than 48%. The split between cars and trucks; car sales unadjusted down 40.8%, trucks down 54%. This is roughly in line with what most on Wall Street were expecting. I talked to the few analysts in the last week and they said don’t be surprised if we see Ford sales dropping anywhere between 45% and 50%.
While these results were about what Wall Street analysts had expected, they still come as a little bit of a shock. Interesting that even with gas prices down substantially from this time last year, Ford (F) truck sales are a particularly weak portion of the results. The troubles for U.S. automakers has not been relieved at all at this point, as consumers are holding off on big purchases right now. The trend is apparent in everything from autos all the way to home sales. Also today, the National Association of Realtors reported pending home sales fell 7.7% in January, and the tracking index is at the lowest point since 2001.
With unemployment raising and the financial markets in a frenzy, there is little incentive for consumers to go out on a limb and make larger purchases right now. However, these are cyclical markets and it is hard to imagine that the indicators could get much worse. One potential reason for the slow down in larger purchases is because of the lack of available credit. We can hope that as the Treasury TALF and TARP programs begin to have an effect on the economy that credit concerns will abate somewhat. The Treasury hopes that lubricating the credit markets will be a catalyst for a broad economic recovery.