Strong auto sales — fueled by low gas prices — are powering the growth in the U.S. economy, the Commerce Department said.
The U.S. economy grew by 3.5 percent in the third quarter — with the auto sector accounting for 0.59 percentage points of the increase. Autos also accounted for 0.55 percent increase in economic output in the second quarter, when the gross domestic product grew by 4.6 percent.
The Commerce Department also said Americans spending on and cars and trucks rose by 9.5 percent in the period ending Sept. 30 to a seasonally adjusted sales rate of $457.1 billion.
Edmunds.com said Thursday it forecasts auto sales in October will rise 6.4 percent over the same month last year and up 3.1 percent over September.
"Car and truck sales have settled into a groove," says Edmunds.com Senior Analyst Jessica Caldwell. "Dealers are welcoming a consistent flow of shoppers into their showrooms, and the pace will likely remain steady through the end of the year. With declining gas prices and strong truck and SUV sales, the industry is poised for a very busy holiday season."
Gas prices recently hit a near four-year-low of $3.08 this week.
Auto forecasters say U.S. sales will continue to rise in the next few years, but the pace of growth will slow further in 2015.
U.S. auto sales are on pace to rise 5 percent in 2014 to 16.4 million — the best performance since 2006 — after rising by nearly 8 percent in 2013. The consensus is "cautious optimism" as production and sales will grow far faster in Asia, while Europe and South America face significant economic concerns.
LMC Automotive senior vice president Jeff Schuster said at a Standard & Poor's auto industry conference earlier this month that it predicts sales will rise just 2 percent next year to 16.7 million — fueled by 100 new, refreshed and redesigned vehicles being introduced in 2015, including Ford's new F-150.
LMC sees U.S. sales rising to 17 million by 2018. LMC predicts the market will rise to 17.5 million in 2020, which would represent the highest-ever U.S. auto sales. Auto sales were above 16 million between 1999 and 2007, hitting a high of 17.4 million in 2000.