Auto Care Insider Volume 102 - 26

MARKET INTELLIGENCE INTELLIGENCE INDICES AND INDICATORS OVERVIEW OF AUGUST 2016 INDUSTRY INDICATORS REPORT By Dr. Timothy G. Nash THE U.S. economy continued to show mixed results in August with a less than impressive 151,000 new jobs created for the month. The August figures were disappointing considering the economy created more than 250,000 jobs in both June and July, according to the Bureau of Labor Statistics. The unemployment rate remained constant at 4.9 percent, but it was accompanied by a disappointing labor force participation rate of 62.8 percent, the lowest number since the late 1970s. Average hourly earnings increased slightly in August by 3 cents to $25.03 which is up roughly 1.4 percent over the last 12 months. The U.S. national debt is approaching 20 trillion dollars or 105 percent of U.S. GDP, with the specter of higher interest rates posing an additional drag on the U.S. economy in the future. Real wages remain sluggish, with consumer spending making up 70 percent of U.S. GDP. Real average hourly earnings growth of 3 percent or greater is imperative if average U.S. GDP growth is to return to 3.5 percent AUGUST 2016 | Industry Indicators Assessment Summaries April May June July Favorable condition for auto care industry = 8 8 9 6 AUTO RETAIL REPORT Indeterminate trend - should monitor = 9 8 5 4 Unfavorable condition for auto care industry = 6 7 9 6 Data not available = na 0 0 0 7 Favorable condition for auto care industry = 12 9 12 10 AUTO PARTS MANUFACTURING REPORT Indeterminate trend - should monitor = 7 7 4 3 Unfavorable condition for auto care industry = 4 7 7 4 Data not available = na 0 0 0 6 HEAVY DUTY AFTERMARKET REPORT 26 Favorable condition for auto care industry = 14 14 14 12 Indeterminate trend - should monitor = 4 3 2 4 Unfavorable condition for auto care industry = 4 5 6 5 Data not available = na 0 0 0 1 AUTO CARE INSIDER | VOL. 102 or higher. Over the last 12 months, U.S. real wages have increased less than 1.5 percent resulting in U.S. GDP growing at only 2 percent on an annualized basis. The U.S. continues to receive little help from the global economy as China and much of the global economy are growing at a slower pace in 2016 and are providing little catalyst for additional GDP growth in the U.S. Through eight months, consumer spending continues to be the brightest spot of the U.S. economy, but will not pick up steam in the future given the state of U.S. wage growth. Finally, investment in business infrastructure, equipment and intellectual property has been declining in 2016, especially given the state of current oil prices. Dr. Nash is senior vice president and director of the McNair Center for the Advancement of Free Enterprise and Entrepreneurship at Northwood University. This report was prepared with the assistance of Northwood University Aftermarket senior, Matt Fusco. For more information about Northwood University and their Aftermarket Program or Automotive MBA program, visit www.northwood. edu or email Tim Nash at tgnash@northwood.edu. The Industry Indicators Report is an Auto Care Association member-only benefit. Research is posted in the Knowledge Center on the Auto Care Association website at www.autocare.org and is accessible through Auto Care Association username and password. For assistance, contact the Auto Care Association membership department at 301-654-6664. http://www.northwood.edu http://www.northwood.edu http://www.autocare.org

Table of Contents for the Digital Edition of Auto Care Insider Volume 102