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WESTLAKE VILLAGE, Calif. and McLEAN, Va. — New-vehicle retail sales apparently are limping to the finish as June closes. J.D. Power and Associates indicated on Wednesday that weakness seen earlier in the month has progressed at an accelerated rate.

As a result, J.D. Power believes the selling rate has dipped below 8.5 million units, according to the real-time transaction data from more than 8,900 retail franchisees throughout the United States.

In the week leading up to the close of the month, firm analysts determined June new-vehicle retail sales were down 5 percent compared with one year ago.

Since fleet sales are not expected to change significantly, J.D. Power calculated the total seasonally adjusted annualized rate (SAAR) may come in well below the 10.9 million units the firm previously expected.

Jeff Schuster, executive director of global forecasting at J.D. Power attempted to quantify why retail sales are slowing at such a rapid pace.

"It appears that the volatility in the stock market and downbeat economic reports have caused a decrease in consumer confidence, leading to a self-fulfilling prophecy," Schuster explained

"Consumers are clearly hunkering down in light of the current environment, waiting for signs of a renewed recovery," he added.

A little more than a week ago, J.D. Power contended that June new-vehicle retail sales were expected to come in at 768,000 units. That figure would have represented a SAAR of 8.6 million units.

As a point of reference, analysts mentioned May's selling rate was 8.9 million units, while the mark in June of last year was 8.2 million units.

"With the recovery not progressing as expected, it's gut-check time for the automotive industry," Schuster declared at the time of the previous forecast.

"The industry's discipline will be put to the test even more in the coming months if a more pronounced recovery doesn't get under way," he concluded.

NADA Remains Hopeful

Despite the worsening forecast from J.D. Power, Paul Taylor, chief economist for the National Automobile Dealers Association, attempted to find positive attributes about the current economic state and how it relates to new-vehicle sales.

"Consumer confidence and spending are being affected by uncertainty about the outlook for economic growth and the environmental disaster unfolding in the Gulf of Mexico," Taylor indicated on Wednesday. "A few analysts suggest a ‘double-dip' in the economy may be on the way."

However, Taylor and other NADA analysts estimate the economy will continue to recover at a modest pace with the probability of a double-dip in economic growth at only 15 percent.

"News on home prices stabilizing in the second quarter will help boost car sales, since a majority of households have most of their net assets represented by home equity," Taylor interjected.

Taylor also touched on another key factor of retail sales — national unemployment levels.

"Measured unemployment remains high, despite the creation of new jobs because people who are trying to re-enter the labor force are counted as unemployed," Taylor explained

"Optimism on the jobs front is a positive sign for long-term economic growth," he added.

Taylor went on to note one other element that he considers "a bit of good news is that inflation remains extremely low."