On This PageMarch 1994, No. 79

The Impact of the Auto Industry on the Economy
Last Updated: 02/17/94
Economists have consistently argued that durable goods are among the primary drivers of economic activity. The cyclical tendencies of this sector make durable goods key indicators of cyclical turning points and trends in the overall economy. No industry better exemplifies this than the auto industry. In the Midwest, the auto sector plays an even more central role because of its disproportionate concentration in the region. Yet both nationally and regionally, analysts who wish to use the auto industry as a bellwether for the macroeconomy must be able to distinguish between the industry's cyclical trends on the one hand, and technical or structural trends on the other.