US Auto Market Slow Down Has An Ominous Ripple Effect

After a seven-year comeback from a near death experience, the US auto industry has hit the predicted plateau as the marketplace has caught up with deferred demand in the wake of the economic crisis.

This comes at a critical time for the American economy in general. The auto segment and its feeder industries account for some 7 percent of domestic commercial activity. The out-sized economic role of the auto industry is evident in that it accounts for 4 percent of total US jobs, and 3.5 percent of Gross Domestic Product.

And according to recent study by the Brookings Institution the robust recovery of the auto industry may actually have masked a relative sluggish recovery of the US manufacturing in recent years.

In view of the current political environment with President Trump publicly jawboning manufacturers on job creation, the reality of the industry slowdown may become a tweet-fueled flashpoint as carmakers begin announcing seasonal slowdowns, shift reductions and temporary furloughs.

One bright spot in the US auto industry is thanks to foreign companies, which have established vast manufacturing facilities in the US to service their global markets.