The auto industry has long been a cyclical business, and though this last trough was a deep one, the coming boom has economists excited. According to Bloomberg, the auto industry's comeback contributed fully half of the 2.2 percent national economic growth in the first quarter of this year. Auto sales are on target to top 14 million vehicles this year, the best pace in four years.

Production is up at all three domestic carmakers, which has a ripple effect throughout the economy. Bloomberg cites Chad Moutray, chief economist of the National Association of Manufacturers, who estimates that every dollar spent on a new vehicle leads to an addition $2.02 in economic activity. The industry's share of gross domestic product for the quarter was 2.8 percent, which is nearly as high as it was in 2007, before the economic crisis that devastated the industry, according to the report.

Yet despite the rise in fortunes for carmakers, stock prices have yet to follow suit. A key automotive index is up just 1.5 percent so far this year, but is down 31 percent in the past 12 months, according to the report. The U.S. Treasury Department recently indicated that because of lagging stock prices, it would not be divesting its share of General Motors stock anytime soon.


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    • 1 Second Ago
  • 29 Comments
      Toneron
      • 2 Years Ago
      Kool-aid anyone? LOL
      tributetodrive
      • 2 Years Ago
      What they dont tell you is the new sales were due to all the used cars sky rocketing in price due to high demand. People still cant afford new ones but are forced into it. The growth is an illusion.
      • 2 Years Ago
      [blocked]
      Shiftright
      • 2 Years Ago
      Aw man, the Republicans are really gonna be mad hearing this.
        TelegramSam
        • 2 Years Ago
        @Shiftright
        Not exactly. Dealer owners are a large GOP constituency. That being said, it does run contrary to their rhetoric.
          Randy
          • 2 Years Ago
          @TelegramSam
          Yeah, that was until they heard Romney would have let them all go out of business! Now they're converting! Oh wait, doesn't Romney want credit for the bailout even though he said he wouldn't done it? Next on Fox; live coverage of Mitt Romney Flip Flopping in the same paragraph and hard core republicans nodding "yes, yes, yes" to every contradiction! RRRRRRRROFL
        1454
        • 2 Years Ago
        @Shiftright
        Why would anyone be mad to hear this? As I stated previously, GM is a loser. Chrysler has saw gains, but I attribute that to fiat more than Chrysler. http://online.wsj.com/mdc/public/page/2_3022-autosales.html The auto industry turning around has nothing to do with the white house and it's failure of a decision to give GM money.
        • 2 Years Ago
        @Shiftright
        [blocked]
      Sean Conrad
      • 2 Years Ago
      http://www.youtube.com/watch?v=VL4xRwl1f3A
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