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Auto Manufacturing Still Snarled
More than three years after the initial pandemic lockdowns, the automotive market is still out of balance. Sales are down from pre-pandemic levels, production still lags (only 149,000 vehicles were produced domestically in June, just half of the level prior to 2020) and auto inventories remain extremely low. New-vehicle prices show some signs of plateauing but at extremely elevated levels: The average new price is more than $47,000, 30% higher than just a few years ago. High interest rates are also taking a toll on buyers. More than 17% of all financed vehicles come with a monthly payment of more than $1,000. Most borrowers are locked into loans of longer than five years at rates between 8.5% and 9.6%.
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