Posted tagged ‘consumers’

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R.I.P the American Made Sedan

November 28, 2018

In the last six years the share of light vehicle sales (sedans, station wagons, SUVs, pickups, minvans) in the U.S. that were autos (sedans and station wagons ) versus light trucks (pickups, minivans, SUVs) has declined by 20%.  Autos are now about 30% of all light vehicle sales, in 1990 the percentage was 65%.  Of the top 5 selling light vehicles in the U.S. in 2017, only the Toyota Camry is a sedan and there was not a single American made sedan in the top 20 selling vehicles.  Share of Autos

By far, the top selling vehicle is the Ford F series pickup, selling more than twice the number of the top selling sedan, and 60% more than the next best selling vehicle (the Chevrolet Silverado pickup).  The market has clearly changed, helped by lower gasoline prices, recent changes in CAFÉ (fuel efficiency) standards, and most importantly consumer preferences.  GM recently announced the closing of several manufacturing facilities.  I worked on 2 energy projects in Lordstown, OH where GM built its (once) popular Chevy Cruz and it is painful to hear that GM will be closing that facility after what was a period of renewed optimism in the region.

Categories: Automobiles, manufacturing, retail sales, Uncategorized
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The Coming “Consumerism” of Residential Electricty Customers

January 9, 2013

It is no secret that the price of electricity in New Hampshire in relation to prices in most of  the U.S. is high.  That is true for all types of consumers of electricity, residential, commercial, and industrial, but prices for industrial customers were especially high compared to prices across the country.  New England is known for high energy prices but New Hampshire’s electricity prices compare more favorably to the region than they do to other regions and states.  Industrial consumers of electricity in NH, however,  seemed to pay relatively higher prices in comparison to industrial consumers across New England.  Over the last half of the past decade that  changed.  Either because of competition for industrial customers, special rates, or other reasons, the relative price of electricity for industrial customers in NH fell significantly in relation to average prices in New England and are now (through 2011) just below the regional average.  For residential consumers price trends are different.  Compared to the New England average, prices per kwh were relatively low for NH’s residential consumers, but they have been rising and are now (through 2011) just above the New England average.

NH Electricity Prices as a Pct of NE

The price competition that has benefited industrial consumers of electricity in NH is likely partially responsible for the rising prices and higher relative prices facing residential customers. Prices for residential consumers seemed to rise more just as  prices for industrial consumers fell.   As a result, as is being reported in a number of media outlets, competition is becoming more robust in NH for residential consumers of electricity.  That will eventually result in lower or more slowly growing average electricity prices for NH’s residential customers.   Competition does lower prices but it will only do so  for those who actively  participate in the competitive market.  Just like a car dealer,  electric utilities will look for someone to pay the full “sticker price” for every consumer who gets a “deal”.

Categories: Electricity, Energy, New Hampshire, prices
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Purchasing Power of Households Should Boost Consumer Spending

November 30, 2012

Households are arguably better positioned to increase their spending than at any time over the past decade. I define household purchasing power, in the aggregate,  as a combination of income and household financial obligations.  Household financial obligations include all debt obligations as well as things like housing rental costs, auto leases, insurance and property tax payments.   A combination of low interest rates that reduce the cost of debt for households as well as reductions in the use of credit and households paying down debt since the recession, have all combined to lower the financial obligations of households (in the aggregate) as a percentage of household disposable income.  Real wage and salary income is also increasing (even if not for all individual households).  In combination, the reduction in financial obligations and rising aggregate income should result in increasing consumer expenditures.  A  lack of conviction in the economic recovery, a decline in home values that affect consumer’s sense of financial well-being, and higher energy prices over the past year have all helped restrain consumer confidence and spending.  But energy prices are falling and home prices (in most areas) are rising.  As hiring (and thus wage and salary growth) accelerates, the stage is set for a long-awaited burst of consumer spending.

Consumer Health

Categories: consumers, Debt, Financial, Household Finances
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Measuring Consumer Financial Distress, are We Really Better Off Today?

November 15, 2012

The Consumer Distress Index is a quarterly comprehensive picture of the average American household’s financial condition.  The index is calculated for the nation and each of the 50 states.  The index measures 5 categories of personal finance that reflect or lead to a secure, stable financial life—Employment, Housing, Credit, Household Budget and Net Worth.   It is calculated by CredAbility,  a  nonprofit credit counseling service, uses 65 data points using public and private data to measure consumer financial distress.  According to their Consumer Distress Index, only 12 states have lower levels of financial distress among households than does New Hampshire.    Lower scores indicate higher levels of financial distress.  The chart below compares NH with the U.S. average.    It shows that, by this measure, NH households are about as financially well-off as they were just prior to the recession, but that the financial health of households has generally deteriorated since the second-half of the last decade.  Not surprising given the increases in employment insecurity and decreases in the value of most households largest asset, their home.

 CredAbility categorizes distress scores using the following:

Less than 60 Emergency / Crisis
60 – 69 Distressed / Unstable
70 – 79 Weakening / At-Risk
80 – 89 Good / Stable
90 and Above Excellent / Secure

By that scale NH, with a score of 75.68 is “At-Risk”, while the U.S. average household is bordering on “unstable/distressed” with a score of 70.48.   According to this measure, NH households are about or just slightly below where they were prior to the recession in terms of financial distress, while the average U.S. household is in more financial distress than they were prior to the recession.  I don’t know how much concurrent validity this measure has but I do know that if I had used it, instead of a state-level “misery index” (the sum of unemployment and inflation) to predict the outcome of the election it would have been a less  accurate predictor of election results.

Categories: consumers, Financial, Household Finances
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