GDP falls, leaving some Charlotte car dealerships worried for the future
One Charlotte dealer said a $2,500 used car now sells for almost twice that.
CHARLOTTE, N.C. — The U.S economy reported a hit. The Gross Domestic Product (GDP) fell .9% in the second quarter. This is the second straight decline and economic watchdogs said this is a strong sign of a recession.
Experts told WCNC Charlotte many Americans are not spending on large value products like cars.
Mike Hutchens, owner of Mike’s Auto Sales in Charlotte said, he’s taking hits too. His lot used to be full of cars and people were eager to buy.
But as the GDP fell and the word ‘recession’ looms, Joseph Von Nessen – an expert in economics at the University of South Carolina – said people are taking the conservative approach to spending.
“Consumers have been shifting away from big ticket items and looking to purchase more services,” Von Nessen said.
Hutchens said a shortage of microchips, found in many cars, is making vehicles more difficult to come by. Less supply is driving prices up. He said some people can’t afford that.
“When you do find them, you’re paying for them,” Hutchens said. “Every day, people are coming in trying to find a used car.”
In fact, Hutchens estimates a used car typically valued at $2,500 now sells for almost twice that. He added he’s seen a 30% decrease in sales over the past year, or about 60 cars worth around $6,000 a piece. This puts him down $360,000. And the possible future for the economy has Hutchens holding on tight.
John Connaughton with UNC Charlotte said while the GDP is falling, job creation is up. He added the labor market has a lag and expects it to fall in the upcoming months.
Contact Austin Walker at awalker@wcnc.com and follow him on Facebook, Twitter, and Instagram.
WCNC Charlotte is always asking “where’s the money?” If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.