SAN FRANCISCO (AP) - The next five months or so will be difficult ones for U.S. auto dealers, with sales expected to slump, but the chief economist for the National Automobile Dealers Association expects a bit of a rebound in the second half of the year.
Still, economist Paul Taylor predicts U.S. car and light truck sales will drop to about 15.7 million for the full year. That's down about 2.5 percent from the 16.1 million vehicles sold in 2007, the worst year in a decade, and down 1.3 million vehicles from the 17 million sold as recently as 2005.
In remarks prepared for a speech Sunday at the NADA's annual convention in San Francisco, Taylor predicted slow economic growth and weak sales during the first half of the year, with unemployment and credit problems lingering.
'Energy costs of gasoline, home heating and cooling will continue to drain money from consumer budgets and slow down consumer spending,' he said.
Other economists and industry analysts have predicted U.S. sales as low as 15.5 million, while some automakers have predicted up to 16 million.
Taylor predicted that unemployment would peak at about 5.3 percent this year, up from 4.9 percent in January.
But even with the Federal Reserve's January interest rate cuts that totaled 1.25 percentage points, and a $168 billion economic stimulus package approved by Congress, Taylor said real estate will continue to be a problem in some regions.
'A sagging residential real estate market and credit crunch will be helped by recent interest rate cuts,' he said. 'But real estate difficulties will persist into 2009 for about half of the U.S. population.'
The four-day NADA convention is attended by about 10,000 dealers and spouses.
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