WASHINGTON -- The Obama administrations cash-for-clunkers program pulled forward new-car sales from the future that helped stimulate an economy mired in recession, according to the White House Council of Economic Advisers.
The program triggered what could be the biggest two-month spike in auto sales on record, the White House said yesterday, citing industry forecasters.
The preliminary analysis given to Congress estimated that third-quarter gross domestic product will be 0.3 to 0.4 percentage points higher at an annual rate than it would have been without the program.
This increase will be sustained in the fourth quarter because of increased auto production to replace depleted dealer inventory, the White House said in a statement.
The program is expected to boost GDP when we need it in the short run, the statement said. Any offsetting effect on GDP in future years is expected to be gradual.
The program will generate 42,000 jobs during the second half of the year, the statement said.
General Motors Co. and Ford Motor Co. have announced plans to increase production in the second half to compensate for dealer inventory depleted by the clunkers program.
Sales under the $3 billion program began July 1 and ended yesterday at 8 p.m.Customers were given $3,500 or $4,500 cash incentives to trade in vehicles for new, more fuel-efficient cars and light trucks.
The environmental benefits of the program extended beyond improvements in fuel economy to include reduced air pollution because the new cars produce fewer emissions than the trade-ins, the White House said.