Another rosy forecast

GM vehicles wait to be uncovered at the 2014 Detroit auto show. Photo credit: DAVID PHILLIPS

As the 2014 Detroit auto show nears, the National Automobile Dealers Association on Friday joined other forecasters in projecting more gains in the U.S. light-vehicle market. NADA predicts 16.4 million new cars and light trucks will be purchased or leased in the U.S. this year, a 5.1 percent increase from 2013. "Consumers will be far better off in 2014 than last year," NADA's chief economist, Steven Szakaly, said Friday. "Employment is improving. Debt has been reduced, and home prices across all regions of the country will remain stable or will rise, yielding a positive wealth effect." Despite Friday's weak jobs report from the federal government, NADA said employment, particularly in the construction and services industries, will continue to improve this year, and a continued moderation in gasoline prices and improvements in the housing market will help to offset stagnation in wages and income in 2014. "Growth would have been stronger in 2013 without a series of contentious fiscal crises in Washington and a federal government shutdown last fall," Szakaly said.