Job growth slowed to the year’s weakest pace last month as the latest coronavirus wave dashed hopes of an imminent return to normal for the U.S. economy.
Employers added just 194,000 jobs in September, the Labor Department said Friday, down from 366,000 in August — and far below the increase of more than one million in July, before the highly contagious Delta variant led to a spike in coronavirus cases across much of the country. Leisure and hospitality businesses, a main driver of job growth earlier this year, added fewer than 100,000 jobs for the second straight month.
“Employment is slowing when it should be picking up because we’re still on the course set by the virus,” said Diane Swonk, chief economist for the accounting firm Grant Thornton.
for the Federal Reserve, which is weighing when to begin pulling back support for the economy.
It is possible that the recent slowdown is a Delta-driven blip and will soon fade — or, indeed, may already be largely in the past. The data released on Friday was collected in mid-September, when the Delta wave was near its peak. Since then, cases and hospitalizations have fallen in much of the country, and more timely data from private-sector sources suggests that economic activity has begun to rebound. If those trends continue, people on the sidelines could return to the labor force, and hiring should begin to pick up.
“This report is a glance in the rearview mirror,” said Daniel Zhao, an economist at the career site Glassdoor. “There should be some optimism that there should be a reacceleration in October.”
But it is also possible that the damage done by the pandemic will take longer to heal than economists had hoped. Supply-chain disruptions have been unexpectedly persistent, and shifts in consumer behavior during the pandemic may not soon reverse. In surveys, many workers say they are reconsidering their priorities and do not want to return to their old ways of working.
Expanded unemployment benefits, which many businesses blamed for discouraging people from looking for work, ended nationwide early last month. Schools reopened in person in much of the country, which should have made it easier for parents to return to work. Rising vaccination rates were meant to make reluctant workers feel safe enough to resume their job searches. As recently as August, many economists circled September as the month when workers would flood back into the job market.
Instead, the labor force shrank by nearly 200,000 people. The pandemic’s resurgence delayed office reopenings, disrupted the start of the school year and made some people reluctant to accept jobs requiring face-to-face interaction. At the same time, preliminary evidence suggests that the cutoff in unemployment benefits has done little to push people back to work.
“I am a little bit puzzled, to be honest,” said Aneta Markowska, chief financial economist for the investment bank Jefferies. “We all waited for September for this big flurry of hiring on the premise that unemployment benefits and school reopening would bring people back to the labor force. And it just doesn’t seem like we’re seeing that.”
Ms. Markowska said more people might begin to look for work as the Delta variant eased and as they depleted savings accumulated earlier in the pandemic. But some people have retired early or have found other ways to make ends meet and may be slow to return to the labor force, if they come back at all.
In the meantime, people available to work are enjoying a rare moment of leverage. Average earnings rose 19 cents an hour in September and are up more than $1 an hour over the last year, after a series of strong monthly gains. Pay has risen even faster in some low-wage sectors.
Many businesses are finding that higher wages alone aren’t enough to attract workers, said Becky Frankiewicz, president of the Manpower Group, a staffing firm. After years of expecting employees to work whenever they were needed — often with no set schedule and little notice — companies are finding that workers are now setting the terms.
“They get to choose when, where and in what duration they’re working,” Ms. Frankiewicz said. “That is a role reversal. That is a structural change in the workers’ economy.”
Arizmendi Bakery, a cooperative in San Rafael, Calif., recently raised its wages by $3 an hour, by far the biggest increase in its history. But it is still struggling to attract applicants heading into the crucial holiday season.
“There are many, many, many more businesses hiring than there used to be, so we’re competing with many other businesses that we weren’t competing with before,” said Natalie Baddorf, a baker and one of the owners.
The bakery has managed to hire a few people, including one who began this week. But other workers have given their notice to leave. The bakery, which has been operating on reduced hours since the pandemic began, now has enough business to return to its original hours, but cannot find enough labor to do so.
“We’re talking about cloning ourselves,” Ms. Baddorf said.
Jeanna Smialek and Jim Tankersley contributed reporting.
The spread of the Delta variant has delayed office reopenings, disrupted the start of school and generally dashed hopes for a return to normal after Labor Day. But it has not pushed the U.S. economic recovery into reverse.
Now that recovery faces a new test: the removal of much of the aid that has helped keep households and businesses afloat for the past year and a half.
The Paycheck Protection Program, which distributed hundreds of billions of dollars in grants and loans to thousands of small businesses, concluded last spring. A federal eviction moratorium ended last month after the Supreme Court blocked the Biden administration’s last-minute effort to extend it. Most recently, an estimated 7.5 million people lost unemployment benefits when programs that expanded the system during the pandemic were allowed to lapse.
Next up: the Federal Reserve, which on Wednesday indicated it could start pulling back its stimulus efforts as early as November.
OpenTable, for example, have fallen less than 10 percent from their early-July peak. That is a far smaller decline than during the last Covid surge, last winter.
“It has moved down, but it’s not the same sort of decline,” Mr. Bryson said of the OpenTable data. “We’re living with it.”
$120 billion in monthly bond purchases — which have kept borrowing cheap and money flowing through the economy — but it will almost certainly keep interest rates near zero into next year. Millions of parents will continue to receive monthly checks through the end of the year because of the expanded child tax credit passed in March as part of President Biden’s $1.9 trillion aid package.
That bill, known as the American Rescue Plan, also provided $350 billion to state and local governments, $21.6 billion in rental aid and $10 billion in mortgage assistance, among other programs. But much has not been spent, said Wendy Edelberg, director of the Hamilton Project, an economic-policy arm of the Brookings Institution.
“Those delays are frustrating,” she said. “At the same time, what that also means is that support is going to continue having an effect over the next several quarters.”
Household savings could provide a buffer — if they last.
Economists, including officials in the Biden administration, say that as the economy heals, there will be a gradual “handoff” from government aid to the private sector. That transition could be eased by a record-setting pile of household savings, which could help prop up consumer spending as government aid wanes.
A lot of that money is held by richer, white-collar workers who held on to their jobs and saw their stock portfolios swell even as the pandemic constrained their spending. But many lower-income households have built up at least a small savings cushion during the pandemic because of stimulus checks, enhanced unemployment benefits and other aid, according to researchers at the JPMorgan Chase Institute.
“The good news is that people are going into the fall with some reserves, more reserves than normal,” said Fiona Greig, co-director of the institute. “That can give them some runway in which to look for a job.”
recent survey by Alignable, a social network for small business owners. Not all have had sales turn lower, said Eric Groves, the company’s chief executive. But the uncertainty is hitting at a crucial moment, heading into the holiday season.
“This is a time of year when business owners in the consumer sector in particular are trying to pull out their crystal ball,” he said. “Now is when they have to be purchasing inventory and doing all that planning.”
open a new location as part of a development project on the West Side of Manhattan.
Go big. If some aid ended up going to people or businesses that didn’t really need help, that was a reasonable trade-off for the benefit of getting money to the millions who did.
Today, the calculus is different. The impact of the pandemic is more tightly focused on a few industries and groups. At the same time, many businesses are having trouble getting workers and materials to meet existing demand. Traditional forms of stimulus that seek to stoke demand won’t help them. If automakers can’t get needed parts, for example, giving money to households won’t lead to more car sales — but it might lead to higher prices.
That puts policymakers in a tight spot. If they don’t get help to those who are struggling, it could cause individual hardship and weaken the recovery. But indiscriminate spending could worsen supply problems and lead to inflation. That calls for a more targeted approach, focusing on the specific groups and industries that need it most, said Nela Richardson, chief economist for ADP, the payroll processing firm.
“There are a lot of arrows in the quiver still, but you need them to go into the bull’s-eye now rather than just going all over,” Ms. Richardson said.
Eighteen months into the pandemic, Jerome H. Powell, the Federal Reserve chair, has offered the strongest sign yet that the Fed is prepared to soon withdraw one leg of the support it has been providing to the economy as conditions strengthen.
At the same time, Mr. Powell made clear on Friday that interest rate increases remained far away, and that the central bank was monitoring risks posed by the Delta variant of the coronavirus.
The Fed has been trying to bolster economic activity by buying $120 billion in government-backed bonds each month and by leaving its policy interest rate at rock bottom. Officials have been debating when to begin slowing their bond buying, the first step in moving toward a more normal policy setting. They have said they would like to make “substantial further progress” toward stable inflation and full employment before doing so.
Mr. Powell, speaking at a closely watched conference that the Kansas City Fed holds each year, used his remarks to explain that he thinks the Fed has met that test when it comes to inflation and is making “clear progress toward maximum employment.”
six million fewer jobs than before the pandemic. And the Delta variant could cause consumers and businesses to pull back as it foils return-to-office plans and threatens to shut down schools and child care centers. That could lead to a slower jobs rebound.
Mr. Powell made clear that the Fed wants to avoid overreacting to a recent burst in inflation that it believes will most likely prove temporary, because doing so could leave workers on the sidelines and weaken growth prematurely. While the Fed could start to remove one piece of its support, he emphasized that slowing bond purchases did not indicate that the Fed was prepared to raise rates.
“We have much ground to cover to reach maximum employment, and time will tell whether we have reached 2 percent inflation on a sustainable basis,” he said in his address to the conference, which was held online instead of its usual venue — Jackson Hole in Wyoming — because of the latest coronavirus wave.
The distinction he drew — between bond buying, which keeps financial markets chugging along, and rates, which are the Fed’s more traditional and arguably more powerful tool to keep money cheap and demand strong — sent an important signal that the Fed is going to be careful to let the economy heal more fully before really putting away its monetary tools, economists said.
told CNBC on Friday that he supported winding down the purchases “as quickly as possible.”
“Let’s start the taper, and let’s do it quickly,” he said. “Let’s not have this linger.”
James Bullard, the president of the Federal Reserve Bank of St. Louis, said on Friday that the central bank should finish tapering by the end of the first quarter next year. If inflation starts to moderate then, the country will be in “great shape,” Mr. Bullard told Fox Business.
“If it doesn’t moderate, then I think the Fed is going to have to be more aggressive in 2022,” he said.
ushered in a new policy framework at last year’s Jackson Hole gathering that dictates a more patient approach, one that might guard against a similar overreaction.
But as Mr. Bullard’s comments reflected, officials may have their patience tested as inflation climbs.
The Fed’s preferred price gauge, the personal consumption expenditures index, rose 4.2 percent last month from a year earlier, according to Commerce Department data released on Friday. The increase was higher than the 4.1 percent jump that economists in a Bloomberg survey had projected, and the fastest pace since 1991. That is far above the central bank’s 2 percent target, which it tries to hit on average over time.
“The rapid reopening of the economy has brought a sharp run-up in inflation,” Mr. Powell said.
They warn that if the Fed overreacts to today’s inflationary burst, it could wind up with permanently weak inflation, much as Japan and Europe have.
White House economists sided with Mr. Powell’s interpretation in a new round of forecasts issued on Friday. In its midsession review of the administration’s budget forecasts, the Office of Management and Budget said it expected the Consumer Price Index inflation rate to hit 4.8 percent for the year. That is more than double the administration’s initial forecast of 2.1 percent.
initially expected. But they still insist that it will be short-lived and foresee inflation dropping to 2.5 percent in 2022. The White House also revised its forecast of growth for the year, to 7.1 percent from 5.2 percent.
Slow price gains sound like good news to anyone who buys oat milk and eggs, but they can set off a vicious downward cycle. Interest rates include inflation, so when it slows, Fed officials have less room to make money cheap to foster growth during times of trouble. That makes it harder for the economy to recover quickly from downturns, and long periods of weak demand drag prices even lower — creating a cycle of stagnation.
“While the underlying global disinflationary factors are likely to evolve over time, there is little reason to think that they have suddenly reversed or abated,” Mr. Powell said. “It seems more likely that they will continue to weigh on inflation as the pandemic passes into history.”
Mr. Powell offered a detailed explanation of the Fed’s scrutiny of prices, emphasizing that inflation is “so far” coming from a narrow group of goods and services. Officials are keeping an eye on data to make sure prices for durable goods like used cars — which have recently taken off — slow and even fall.
Mr. Powell said the Fed saw “little evidence” of wage increases that might threaten high and lasting inflation. And he pointed out that measures of inflation expectations had not climbed to unwanted levels, but had instead staged a “welcome reversal” of an unhealthy decline.
Still, his remarks carried a tone of watchfulness.
“We would be concerned at signs that inflationary pressures were spreading more broadly through the economy,” he said.
The people here are not Hollywood stars or billionaire tech entrepreneurs who might own Ferraris and private jets. But they are well off. The median household income in the area exceeds $165,000, and half the homes are valued at more than $1 million. Eight in 10 residents have at least an undergraduate degree. As early buyers with high incomes, they can easily take advantage of the federal E.V. tax credit.
The incentives are, in effect, “subsidizing my luxury,” said Mr. Teglia, who also has solar panels on his home. The Model 3s he owns sell for about $40,000 before government incentives.
Dr. Jack Hsiao, an obstetrician-gynecologist, had avoided buying an electric vehicle for fear that he wouldn’t be able to drive very far before having to plug in — a phenomenon known as range anxiety. But his sister, who moved to California from Texas and bought solar panels and a Tesla, persuaded their father, who lives with Dr. Hsiao, 54, to buy one, too. Following his family, Dr. Hsiao bought a Tesla and solar panels.
“Gas prices have just gone through the roof, and so, given that I’ve got the solar panels, it cost me next to nothing to charge,” he said. “For me, it was just a perfect fit.”
Elaine Borseth, a retired chiropractor, is another convert. Before she bought a Model S, she had never spent more than $20,000 on a car. But after seeing several of the big, sporty sedans on the road, she drove one about seven years ago. “I thought they were sleek and sexy,” said Ms. Borseth, who now runs the Electric Vehicle Association of San Diego.
“It’s almost one of those cases where the more you see, it just kind of breeds upon itself,” she said to explain why her neighborhood has so many electric cars.
For much of the pandemic, Amazon has offered free on-site Covid testing for employees. It incorporated a variety of design features into warehouses to promote social distancing. But a worker at an Amazon warehouse in Oregon, who did not want to be named for fear of retribution, said there had been a gradual reduction in safety features, like the removal of physical barriers to enforce social distancing.
Kelly Nantel, an Amazon spokeswoman, said that the company had removed barriers in some parts of warehouses where workers don’t spend much time in proximity, but that it had kept up distancing measures in other areas, like break rooms.
“We’re continuously evaluating the temporary measures we implemented in response to Covid-19 and making adjustments in alignment with public health authority guidance,” Ms. Nantel said. She added that the company would “begin ramping down our U.S. testing operations by July 30, 2021.”
At REI, the outdoor equipment and apparel retailer, four workers in different parts of the country, who asked not to be named for fear of workplace repercussions, complained that the company had recently enacted a potentially more punitive attendance policy it had planned to put in place just before the pandemic. Under the policy, part-time workers who use more than their allotted sick days are subject to discipline up to termination if the absences are unexcused. The workers also said they were concerned that many stores — after restricting capacity until this spring — had become more and more crowded.
Halley Knigge, a spokeswoman for REI, said that under its new policies the company allowed part-time workers to accrue sick leave for the first time and that the disciplinary policy was not substantively new but merely reworded. The stores, she added, continue to restrict occupancy to no more than 50 percent capacity, as they have since June 2020.
Workers elsewhere in the retail industry also complained about the growing crowds and difficulty of distancing inside stores like supermarkets. Karyn Johnson-Dorsey, a personal shopper from Riverside, Calif., who finds work on Instacart but also has her own roster of clients, said it had been increasingly difficult to maintain a safe distance from unmasked customers since the state eased masking and capacity restrictions in mid-June.
A summer travel bonanza is exceeding expectations, helping airlines earn profits again and brightening the outlook for the rest of the year. It’s a welcome relief for a battered industry and a sign that the rebound that began this spring appears to be here to stay.
The economic upturn, aggressive cost-cutting and an enormous federal stimulus that paid many salaries have helped to improve the finances of the largest carriers, which took on vast amounts of debt and lost billions of dollars during the pandemic.
This month, consumer spending on airlines briefly exceeded 2019 levels on a weekly basis for the first time since the pandemic began, according to Facteus, a research firm that monitors millions of online payments. Ticket prices have rebounded, too: In June, fares were down only 1 percent from the same month in 2019, according to the Adobe Digital Economy Index, which is similarly based on website visits and transactions.
And on Sunday, the Transportation Security Administration screened more than 2.2 million travelers at its airport checkpoints, the most in one day since the start of the pandemic.
planned to hire hundreds of flight attendants and bring back thousands who volunteered for extended leaves during the pandemic.
increase its minimum wage to $15 an hour to retain and attract workers, while Delta is in the middle of hiring thousands of employees. United last month announced plans to buy 270 new planes in the coming years, the largest airplane order in its history and one that would create thousands of jobs nationwide.
Southwest on Thursday reported a profit of $348 million for the quarter that ended in June, its second profitable quarter since the pandemic began. American reported a $19 million profit over the same period, while Delta last week reported a $652 million profit, a pandemic first for each airline. United this week reported a loss, but projected a return to profitability in the third quarter as its business improved faster than forecast.
The financial turnaround has been buoyed by an infusion of $54 billion of federal aid to pay employee salaries over the past year and a half. Without those payments, none of the major airlines would have been able to report profits for the quarter that ended in June. The aid precludes the companies from paying dividends through September 2022.
Each airline offered a hopeful outlook for the current quarter. American projected that passenger capacity would be down only 15 to 20 percent from the third quarter of 2019, while United projected a 26 percent decline and Delta forecast a 28 to 30 percent drop. Southwest, which differs from the other three large carriers in that it operates few international flights, said it expected capacity to be comparable to the third quarter of 2019.
Daily Business Briefing
“We are just really excited about the momentum we’re seeing in the numbers,” Doug Parker, American’s chief executive, told analysts after the company delivered its earnings report.
The financial results and forecasts for the rest of the summer are the latest sign of strength in a comeback that has been building for months. But the airlines have vast amounts of debt to repay — American, the most indebted carrier, announced a plan on Thursday to pay down $15 billion by the end of 2025 — and the rebound hasn’t been free of setbacks.
recent poll from the Global Business Travel Association, an industry association. If other companies follow Apple’s lead in delaying a return to the office, though, the corporate travel recovery could be held back.
Delta said it expected domestic business trips to recover to about 60 percent of 2019 levels by September, up from 40 percent in June. Those figures roughly align with estimates from United.
“The demand is recovering even faster than we had hoped domestically,” Mr. Kirby of United said on Wednesday.
International travel has slowly started to recover, too, as more countries, particularly in Europe, open up to American travelers who can provide proof of vaccination or a negative coronavirus test. But airlines are lobbying the Biden administration to loosen restrictions in kind, which, they say, will allow the recovery to accelerate.
“I think the surge is coming, and just as we’ve seen it on the consumer side, we’re getting ready for it on the business side,” Mr. Bastian of Delta said last week. “Once you open businesses, offices, and you get international markets opened, I think it’s going to be a very good run over the next 12 to 24 months.”
Ms. Hyman said the valuation dip did not mean anything. The company needed money to ensure it was prepared for any scenario, she said, pointing out that nobody knew when the pandemic would abate.
Of all the changes Rent the Runway made to its business last year, the biggest was the shift from its unlimited offering, which had allowed subscribers to swap as many items as they wanted for a monthly fee. Now, it offers a few different tiers — users can rent up to four items per month, in one shipment, for $89, or up to 16 items, and up to four shipments, for $199. The new model appeals to a broader array of customers and is more cost effective and better for the environment, Ms. Hyman said, as it cuts down on the nonstop deliveries and dry cleaning.
Traction in the men’s wear rental market continues to be slow, but before the pandemic, the sector was surging for women.
Urban Outfitters introduced its rental service, Nuuly, in 2019, and offerings had cropped up from a wide variety of mall chains and other brands, like Vince, Rebecca Taylor, H&M and Ganni. Major department stores such as Selfridges in London recently began high-profile women’s wear rental programs, and this year Ralph Lauren became the first luxury brand to offer direct clothing rentals.
For luxury brands, rental could represent 10 percent of revenue by 2030, according to a recent Bain & Company report. When an item is rented 20 times, for instance, it generates a profit margin of more than 40 percent, the report found.
While rental clothing services and their monthly subscription fees became far less appealing during the pandemic, secondhand clothing sites flourished, with companies like Poshmark and ThredUp going public. Coresight Research estimated the size of the U.S. rental apparel market at $1.3 billion in 2019, and said it declined to $1.1 billion last year. The firm expects a rebound to “at least” $1.2 billion in 2021.
“For the next few months, me and my wife were up morning to night, packaging orders and making the dreaded trip to the post office every day to drop off the packages,” Mr. Schmerling said.
Another start-up, SnackMagic, entered to help.
Its roots trace back to March of last year, when a food delivery service called Stadium was on track to have its best month ever. Founded in 2018, Stadium carved out a niche for the business lunch where no one can decide among sushi, salads or burgers. Its group ordering systems allowed employees to pick whatever they wanted from a variety of restaurants. Stadium collected the food and delivered it to the office.
The pandemic, and New York City office closures, caused Stadium’s business to evaporate overnight, so a co-founder, Shaunak Amin, and other executives scrambled to find a Plan B. They eventually realized that a number of snack companies were sitting on tons of bars, cookies and drinks that grocery stores and others didn’t want because they were focusing on essential goods.
Stadium had a side business of allowing office workers to throw a snack — a bag of chips or a cookie — into their food order. Now, that would become Stadium’s primary business. Two months later, SnackMagic was allowing companies to send boxes of snacks to people working at home — a treat ahead of a Zoom meeting or simply a thank-you, Mr. Amin said.
When the company started, he said, it had 75 brands and 250 unique items. Now it’s up to 300 brands and 850 items, adding about 10 to 15 applications to get onto the platform each day.
As employees begin to trickle back into offices, the question for Lupii and other companies is: Where are people going to want to try a new snack?
Many are betting consumers will still want novelty at home. Others have said some office micro kitchens are cutting budgets, uncertain how many employees will return to the office on a regular basis.
Mike Schenk, chief economist for the Credit Union National Association, said he didn’t have comprehensive data on what credit unions were doing. But, he said, his calls to several credit unions found that “most don’t charge those fees anymore.” The association has long supported an elimination of the transaction cap as best for depositors, he said, and many credit unions routinely waive the fees anyway.
Nevertheless, some credit unions, including Alliant and PenFed, still cite the old federal six-withdrawal limit restriction on their websites. “If I exceed these limitations my account will be subject to an excessive transaction fee and may be closed,” PenFed’s general savings disclosure says.
Eliminating transaction caps may end up changing consumer behavior, said Simon Zhen, senior research analyst at MyBankTracker.com. Savings accounts typically offer higher rates than checking accounts because they are designed for money to remain there and grow. If the distinction between a savings account and a checking account is eliminated, consumers may have less reason to use checking accounts, and banks may have less incentive to offer better rates on savings accounts.
“If you take the limit away, what’s the difference between a saving account and a checking account?” Mr. Zhen asked.
Here are some questions and answers about savings account fees:
How can I avoid excessive savings withdrawal fees?
Set up text or email alerts to notify you when you are approaching the account’s limit. You can also consider using a line of credit, rather than linking your checking account to your savings account, to cover any overdrafts and reduce unnecessary transfers.
Also, savings withdrawal limits apply to the number of transactions, not the amount. If you know you’ll be needing some cash from your savings account, consider making one or two larger withdrawals instead of several smaller ones, said Greg McBride, chief financial analyst at Bankrate.com. (Separately, some accounts may limit the total amount of cash that can be withdrawn or transferred in a single transaction.)
What are current interest rates paid on savings accounts?
Even on “high yield” accounts at online banks, which typically pay higher rates because they have no branch network to maintain, annual percentage yields hover around 0.40 or 0.50 percent — far below what those accounts typically paid a year ago. Still, that’s better than the average savings account rate of 0.14 percent, according to DepositRates.
What if I need to withdraw money in excess of my account’s transaction limits?
Contact your bank to discuss your situation and ask for a waiver of the fee, Mr. McBride said. Banks are likely to be flexible, given the continued economic fallout of the pandemic.
In the first months of 2021, what was good for the auto industry was decidedly good for the American economy.
Spending on motor vehicles and parts rose almost 13 percent in the first quarter, making a big contribution to the increase in gross domestic product, the Commerce Department reported Thursday. Strong sales of new and used vehicles were propelled by consumers who had delayed purchases earlier in the pandemic and by others who — because of the virus — wanted to rely less on public transit or shared transportation services like Uber.
Two rounds of stimulus payments since late December were a big factor. Low interest rates, readily available credit, rising home values and stock prices, and strong trade-in values for used models also eased the path for consumers.
In fact, demand in the first quarter was robust enough that the auto industry was able to post healthy results despite a shortage of computer chips that forced temporary shutdowns of many auto plants.
Ford Motor reported it made a $3.3 billion profit in the quarter, its highest total since 2011. While it produced 200,000 fewer vehicles in the quarter than it had planned, the average selling price of Ford models rose to $47,858, 8 percent higher than in the first quarter a year ago, Edmunds reported.
The combination of strong consumer demand and tight inventories — partly a result of the chip shortage — has produced something of a dream scenario for auto retailers. At AutoNation, the country’s largest chain of dealerships, many vehicles are being sold near or at sticker price even before they arrive from the factory.
“I’ve never seen so much preselling of shipments,” said Mike Jackson, the chief executive. “These vehicles are coming in and going right out.”
In the first quarter, AutoNation’s revenue jumped 27 percent, to $5.9 billion, and the company reported $239 million in profit. That was a turnaround from a loss a year ago, when the pandemic crimped sales and forced AutoNation to close stores.