By Gary S. Vasilash

During his “Forecast: 2024” webcast presentation, Jonathan Smoke, Cox Automotive chief economist, made a number of observations and predictions that ought to make potential vehicle purchasers happy.

Like the likelihood that the unemployment rate will stay at 4.0-4.1% throughout the year; that inflation will slowly decline; that interest rates will go in the right direction for those who need a loan.

Charlie Chesbrough, Cox senior economist, pointed out that new vehicle inventory in 2023 was up 51% compared with 2022, and one consequence is that incentives are rising, so it appears that there is going to be a shift from a seller’s market to a buyer’s market.

And speaking of buyer’s market and inventories: Stephanie Valdez Streaty, Cox director of Industry Insights, noted that at the end of 2023 the day’s supply of ICE vehicles on dealer lots was 69 days—but it was 113 days for electric vehicles. There is likely to be some dealing.

But there was one point that Smoke made that shows just how important vehicles and costs associated with them are to people.

As the graph below shows, as the price of gasoline goes down, the state of consumer sentiment rises.

Simply stated: Cheap gas makes people happy.