More Bad News Imminent: August US Auto Production Set To Plunge By Most In 16 Months

Tyler Durden's picture

Over the past several months, many pundits were scratching their heads at the peculiar patterns in summer hiring and layoff trends, which threw all NFP, claims, and JOLTs forecasts in a loop making a mockery of even the best forecasters. The reality is that there was a very specific reason for this abnormal seasonal pattern: numerous car plants worked throughout the summer, avoiding traditional temporary shutdowns and furloughs, in an attempt to provide an optical boost to the Union-endorsed administration. And as always happens (see Cash for Clunkers), every attempt to pull demand or supply from the future to the present results in an eventual collapse in either of these two. Sure enough, with June and July reaping the benefits of advance demand, August is set be an absolutely abysmal month for US auto assemblies and for Industrial Production. Because as Stone McCarthy calculates, based on projections provided by Wards Autos, the U.S. motor vehicle assembly rate for August is projected to decline by 8% to a 10.1 million annualized rate after rising by 4.4% in July. This would be the biggest monthly percentage decline in the assembly rate in about a year and a half, since April 2011's 9.5% drop.

SMRA continues:

For the Fed's industrial production report, we project motor vehicle output to decline by 4% in August after rising by 3.3% in July. The anticipated decline in motor vehicle output will restrain industrial activity in August. In July, industrial output rose by 0.6% with manufacturing output up 0.5%.

And since Industrial Production feeds directly into bean counter models for GDP calculations 2%+ GDP forecasts for Q2 are about to see their floor falling off and the economy return to a sub-stall speed growth rate, even as the growth rate of debt refuses to budge lower by even one iota.

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SilverTree's picture

<-----QE this year.

<-----QE next year.

Vincent Vega's picture

<---------QE for ever and ever.

GetZeeGold's picture



Crap.....what's going happen if I need to buy a Volt?


Vincent Vega's picture

Probably pick one up at a fire sale.

NotApplicable's picture

I'm sure this is merely a seasonal anomaly.

How long was the Dark Ages again?

Manthong's picture

One man’s optical boost is another man’s boiling mirage.

SafelyGraze's picture

"Probably pick one up at a fire sale."

that was funny

ptoemmes's picture

There are two kinds of Volts: ones that have caught on fire and ones that are going to catch on fire.

Turin Turambar's picture

and if it's actually on fire when you buy it, it'll be even cheaper.

DoChenRollingBearing's picture

Buy a Hyundai!  ;)

Hyundai actually makes a nice looking Sonata Hybrid.

Yes, sir!  We have your bearing!  Down in Peru...

slaughterer's picture

I am going back to painting my nude studio model until 10am tomorrow.  Seeing Liesman on CNBC just demoralized me.  

poor fella's picture

Put Liesman's head on your nude and you'll have a museum worthy piece.

I'm sure there's a critic that will write up four or five paragraphs how monumental your symbolic critique of civilization and characteristic frisson between the civilized work force and the awareness of subconscious forces beneath the surface within us all.

or something like that ;)

better yet, slap on a $950k price tag and they'll be beating your door down.

CrashisOptimistic's picture

Bernanke is actually a smart fellow.  He's an academic and looks at data.

Suppose he said, the point of printing money is to be sure that a growing economy is not choked off by its lack.  Since we're not growing very fast, we don't need to add any more.  Further, 10 year bond yields are low and falling again, so there's really no point.

Perhaps no more QE as far as the eye can see.

SheepDog-One's picture

LOL, people still actually think the Fed are mechanics busilly turning wrenches trying to fix things? 

Miss Expectations's picture

I think that the Fed mechanics just keep spraying ether into the economy's carburetor...does our economy still have a carburetor?

boiltherich's picture

does our economy still have a carburetor?

Do we still have an economy?

SilverTree's picture

Most agree they never stopped QE-ing. 


Poetic injustice's picture

"Since we're not growing very fast,"


Are you ASSuming based on official data, like "academics" do?

TrillionDollarBoner's picture

those QE scores would have been reversed a few months ago. looks like kito and sheepie1 have called this right for a while


still room to be wrong though... (december)

Seasmoke's picture

you can pay me now or you pay me later.....but you will pay !

socalbeach's picture

Gives new meaning to the term "money laundering".

GeezerGeek's picture

Back in '63 dimes still contained silver.

glenlloyd's picture

Yes....several of those sorts of quack 'dismissals' going on here in Iowa with WF. They've suggested that it was new FDIC rules that brought this all about, something about taking care that there aren't any more Bernie Madoff's around.

What a load of BS

Long-John-Silver's picture

EPA now stands for Employment Prevention Agency. What better way to reduce pollution than to prevent production of everything.

i-dog's picture

'Agenda 21', biachez! Like it or lump it.

bnbdnb's picture

ECRI - timing was exact. Recession started in Q2, May 2012.

Long-John-Silver's picture

QE Tomorrow, Bitchez!

Alpacanio's picture

Lol. don't you guys get it. QE has never stopped! Look at the National Debt clock!

mrktwtch2's picture

no more channel stuffing..

chunkylover42's picture

<---  QE never

<---  QE forevah!

JustObserving's picture

With US debt and unfunded liabilties currently increasing at $8.35 trillion a year ($22.86 billion a day), we will have QE forever.  

The longer that Bernanke goes without QE, the larger the next QE will be.

JimBowie1958's picture

More QE till we finaly hit the brick wall of inevitable consequences.

the 300000000th percent's picture

Why in the hell are they letting these facts leak out like this, very suspicious!

Meesohaawnee's picture

when you want to figure out a criminal you gotta think like one. Nothing wrong with being suspicious.....

buzzsaw99's picture

I noticed a horse running the other day at RP. The name was I Need A Baleout. Racehorse names are a leading indicator.


Running tomorrow:

Deflationary Fears

Pretend and Extend


StychoKiller's picture

"Grand Apocalypse" is in the running... :>D

ParkAveFlasher's picture

Yes, sales are down, production is down, but I'd like to put a few cars away for my grandchildren.  Any chance at financing?

Hype Alert's picture

Stealth campaign contributions by the union was documented in the WSJ a month or so ago.  The union spends millions in political efforts that are not reported as contributions.  When government gets directly involved in the economy, read Government Motors, it becomes more corrupt than throwing games because of gambling bets.

OldE_Ant's picture

(/sarc) Yeah but arn't bicycles and motorcycle sales at all time highs? 

If they don't have a job, they don't need a car!

I feel a government auto purchase rebate program coming soon.  Maybe they should switch over to manufactoring Armored personnel assault vehicles.  I hear those are selling like hotcakes, or better retool for gun barrels, or ammo.(/sarc)

End of Line

Dr. Engali's picture

I thought Obama saved the U.S automotive industry. Maybe he can by us all a new car out of his stash.

NotApplicable's picture

Help the plebs? Doubt that.

At least not until you see every government worker driving a new GM car first.

They should give them away with scratch-off tickets. The plebs fucking love scratch-off tickets! (thank God for pay-at-the-pump)

youngman's picture

We need more student loans so we can buy more cars...but it must of been the Volts...all those GM Volts

LawsofPhysics's picture

Better get the rest of that bailout money back, and fucking quick.

Curt W's picture

I take it that all the channels are adequately stuffed.