Slow Growth Expected for U.S. Economy

The American car market and general economy each will expand about 3% this year but are likely to drop below that pace in 2015 and beyond, say panelists at the Society of Automotive Analysts' annual Economic Outlook Conference in Detroit on Sunday.

The U.S. gross domestic product, which grew about 2% last year, could expand 3% this year but is likely to lose some of that momentum in 2015, cautions William Strauss, senior economist with the Federal Reserve Bank of Chicago.

He describes the American economy as weak, pointing to forecasts that unemployment is likely to remain above 6% this year and new housing starts won't return to normal until 2016.

Brian Johnson, a senior equity analyst with Barclays, notes that low fuel prices are pushing global demand for SUVs and crossover vehicles and shrinking the price spread across midsize and small cars. He opines that higher vehicle quality, coupled with styles that seem to last longer, may be slowing the pace of the current sales rebound.

Jessica Caldwell, an industry analyst with Edmunds.com, says the U.S. car market is being stabilized by more vehicle choices, restraint on sales incentives and better balanced product lineups among full-line carmakers. She adds that narrowing price gaps between vehicle segments give consumers more buying options.