Car sales normalcy returns

The U.S. new-car market is returning to pre-pandemic norms as supply-chain issues resolve, forcing carmakers to ramp up deals to sustain sales growth.

The annual pace of new-car sales likely rose to 15.6 million in June, from 13 million a year ago, according to the average forecast of seven market researchers.

Cox Automotive raised its full-year forecast to 15 million, from 14.2 million in March, as deliveries to businesses and rental-car companies, which evaporated during pandemic scarcity, rebounded.

“Pent-up demand from individuals and business that couldn’t find product last year is now being unleashed,” Charlie Chesbrough, senior economist at Cox, said on a call with reporters this week.

“Not only has supply returned to the market, but so has discounting.”

Car prices have skyrocketed in recent years from a confluence of factors.

Prices, spending cooled in May

Consumer spending slowed and the Federal Reserve’s preferred inflation gauge continued to moderate in May, the latest signs that the cooldown that policymakers have been aiming for is materializing – albeit more haltingly than they might prefer.

U.S. consumers spent just 0.1% more in May than the month before, the Commerce Department said Friday.

That was down from 0.6% growth in April, which was itself weaker than previously reported. Adjusted for inflation, spending in May was flat.

Slower spending may sound like bad news: Consumption is, after all, the engine of economic growth in America.

But Fed officials have been raising interest rates to try to restrain consumer and business demand, hoping that such a weakening will force companies to stop raising prices so quickly.

That could allow inflation, which has been rapid for more than two years, to return to a normal pace.

For now, price increases are moderating but remain more stubborn than Fed officials might prefer.

Overall inflation cooled to 3.8% in the year through May, Friday’s report showed, the first time it has slipped below 4% since early 2021.

But a “core” inflation measure that stripped out food and fuel costs – which move around a lot – remained stubbornly high.

Officials closely watch that measure for a sense of how quickly prices will increase in the months and years ahead.

While core inflation moderated to 4.6% in May, a softer reading than the 4.7% economists had forecast, it has hovered right around that pace since December 2022.

Spotify ponders music videos

Spotify Technology is considering adding full-length music videos to its app, which could help the streaming service better compete with Alphabet’s YouTube and ByteDance’s TikTok.

The service has already begun talking to partners about the product, according to people familiar with the plan who spoke on the condition of anonymity because they weren’t authorized to speak about it publicly.

Spotify declined to comment.

The feature would add to Spotify’s growing efforts to establish video – which in the streaming media era has tended to be more lucrative than audio – as a core part of its app.

From wire reports