Discounting the Employment Factor

From 2006 through mid-2009, vehicle sales tracked pretty closely with employment figures. Aside from the Cash-for-Clunkers spike in August 2008, vehicle sales were on a downward trajectory for much of that year. Employment figures, too, steadily dropped to 129,000 from 138,000 in that period.

Since mid-2009, though, it appears the shock of low employment has worn off. People are buying cars even with the employment rate sliding. Either that, or people have been forced to replace their vehicles out of necessity.

Take a look at this graph of vehicle sales (measured as a three-month rolling average to reduce choppiness) versus employment data, courtesy of the Bureau of Labor Statistics:

Despite the continued drop in employment, vehicle sales have recovered somewhat. So far in 2010, the monthly average new-car sales rate has been 943,000 units, compared with 869,000 for 2009. As for employment, the average rate for the past two years has held steady in the 130,000 to 131,000 range.