DALLAS — Comerica Bank's newest Auto Affordability Index
showed the purchase and financing of an average-priced new vehicle took 23.1
weeks of median family income in the third quarter of this year.

Analysts found consumers on average spent $75 less on new models
in the third quarter than they did in the second quarter. The historical series
for 2011 and 2012 has been revised, based on more up-to-date annual family
income data.

"Auto affordability improved by 0.2 weeks of median family
income, enough to boost Q3 auto sales to a 14.9 million unit rate in September,"
said Robert Dye, chief economist at Comerica Bank.

"Income growth through Q3 was weak, but interest rates on
auto loans fell, lifting affordability. Given the combination of pent-up
consumer demand and the need to replace vehicles destroyed by Hurricane Sandy,
vehicle sales spiked to a 15.5 million unit rate in November," Dye continued.

"Sales may ease a bit in coming months, but ample credit
availability and a low rate environment remain positives for the auto market.
Downside risk from the Fiscal Cliff is significant for auto sales and many
other U.S. economic variables through the first half of 2013," he went on to
say.

Comerica reiterated this report incorporates the latest data
on consumer spending on light vehicles and on the terms available on auto
loans. The full history of the index is available upon request.

"Some historical data is in the process of being revised by
the data sources and, as a result, revisions to the auto affordability series are
expected in the months ahead," analysts said.

More Discussion about Economy, Fiscal Cliff

Dye and the rest of Comerica's analyst team didn't use many
positive adjectives to describe where there U.S. economy is heading as the year
draws to a close.

"With the election behind us and hurricane season brought to
a dramatic conclusion by Hurricane Sandy, the U.S. economy lurches, stumbles or
fades at the end of 2012," Dye said. "The three verbs all imply a transition
from the deceptively solid 2.7 percent rate of real GDP growth in Q3, to
something less solid, and perhaps less deceptive, too, in late 2012 through
early 2013.

"That there is a transition is evident. The quality of the transition
is not entirely evident," he added.

To explain his point, Dye acknowledged a "lurching" economy
may still recover. He pointed out the current condition has elements pushing it in
a positive direction, such as housing and consumer spending. But he noted there
are factors elements pulling the economy back to recession, such as the Fiscal
Cliff.

"A stumbling economy has fewer positives perhaps consumers
have leaned out too far over their skis and will pull back in early 2013," Dye
said.

Dye also cautioned about the possibility that business investment
could freeze even more than it did in Q3.

"A fading economy simply loses momentum," Dye said. "The
run-up in inventories and government spending that supported the 2.7 percent
growth rate of Q3 real GDP now fades, and there is nothing there to take up the
slack.

Bottom line: where does Comerica place the chances of
recession when 2013 arrives?

Dye said all of the factors "imply a heightened probability
of recession for the first half of 2013, subjectively now placed at 40 percent."


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