A comment or two on the Auto industry.
Americans are buying SUVs and this is causing GM to lay off 1500 workers making cars in the U.S. The GM Mexican plant making the same cars is not laying off personnel BECAUSE of the lower labor costs in Mexico.
The Cost of the average SUV is north of $30,000 - That is a ton of money. With the current Six / Seven year loan on the average car, two things happen, most people cannot upgrade their cars as often and more importantly the MARGINAL barrower is experiencing repayment issues. Any hickup in their income and they fall behind on their car payments.
The most recent commentary on Auto sales new and used appear to indicate that the quantity of relatively new LEASED cars are starting to flood the used car marked. Since monthly Lease payments are lower than Loans many people overbuy what they can really afford .
This large supply of relatively new used cars on the used car market is causing prices to drop AND there are limited buyers even at these lower prices.
Later this year we may very well see more Auto Co. layoffs
Witness bacon now in 1/3,1/2 and 3/4 lb. packaging for crazy prices or little fart cars for even more crazy prices. If you want a real truck plunk down 60k or more. An entire lb. of bacon for ten bucks. My fav. OJ now is almost 7 bucks.And we grow oranges here!! We are suckers for buying the higher priced marketing wonders.
I’ve also heard for the first time, adverts plugging “new” loaner vehicles.....those used while your car is being serviced. like new for very cheap....clearly an over supply and lack of expendable capital. We should soon see that improving, yes ?