Fixed Ops: Economic Outlook: Source

Staying on next year’s interest rate outlook a little longer, things are slowing in the labor market, it’s not enough to cause a panic about unemployment. The October jobs report — with the economy adding just 150,000 jobs and the unemployment rate ticking up to 3.9%

 

Over the past three months, average hourly earnings for all employees have jumped 3.2% but the biggest risk to our stability is that the softening of the job market could turn into a serious downturn.

 

The unemployment rate is already above the Fed’s year-end forecast of 3.8% — the first time since March 2022.

 

If it looked like the jobless rate might surpass the Fed’s year-end 2024 prediction of 4.1%, that would open the door to interest-rate cuts relatively quickly.

 

Service Market Trends: Source

 

Overall, dealership service lanes account for 30% of all service visits in the U.S., down from 35% in 2021,

 

General repair and service stations a close second at 28%.

 

Other locations, including tire repair stores, body shops, and specialists, account for the rest.

 

The reason for those trends and what to focus on to get them back:

 

  1. Owners’ trust in dealerships is waning; for the first time, dealerships are no longer the “most preferred” service provider among vehicle owners.
  2. Of the top five reasons for not returning to a dealership for service, four were cost-related.
  3. Opportunity is there shown by the average # service visit at 2.5 times a year in 2023 up from 2.3 in 2021.
John Ellis CEO & Founder of The Automotive Advisor Team, LLC

Author: John Ellis

Founder & CEO The Automotive Advisor Team, Inc. BEVEveryting, Inc. Double E Consulting, Inc.

LinkedIn page

Leave a Reply