: The projection for the Unemployment Rate is sufficient to allow new automobile sales in the United States to maintain existing trends. As stated above, however, the existing growth trends are modest at best. The projection for the Unemployment Rate is not sufficient (because unemployment will not fall) to lead to a substantial market expansion. Such a market expansion would allow the automobile manufacturing industry in the United States to overcome (a) poor product decisions - e.g., focusing new model development on high energy consumption vehicles, (b) poor quality perceptions by consumers, and (c) loss of competitive advantage to Japanese automobile manufacturers.
Inflation Rate. The rate of inflation is defined in this paper as the Consumer Price Index (CPI) for all consumers in the United States economy. The CPI for all consumers is based on a basket of goods, the prices of which are measured periodically. The index value is an indicator of the difference in price level in a current period of measurement in relation to prices in a base period.
Projected 18-month trend: Change in the CPI is projected at an increase of 3.1 percent over the 18-month period ending 30 September 2006, which reflects an average annual rate of inflation approximating 2.1 percent.
Probable effects on the automobile manufacturing industry in the United States: For major investments such as real estate, the projected rate of low inflation likely will continue to fuel high sales growth. With respect to the sales of new automobiles manufactured in the United States, however, the projected low rate of inflation likely is not sufficient to lead to a substantial market expansion. In the absence of such an expansion, it is probable that the automobile manufacturing in the United States will not be able to overcome (a) poor product decisions - e.g., focusing new model development on high energy consumption vehicles, (b) poor quality perceptions ...