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US Auto Sales, In Weak Recovery, Drop In June

Most automakers saw their U.S. sales drop from May to June, a sign that this year's slow recovery in the industry may be stalling. Americans are delaying big-ticket purchases because they're worried about their jobs in an environment of high unemployment. Nervous consumers could mean a tough summer for automakers, who hope to improve sales after a dismal 2009.

"Consumers are clearly hunkering down in light of the current environment, waiting for signs of a renewed recovery," said Jeff Schuster, executive director of global forecasting at J.D. Power.

Job worries were reinforced Thursday when the Labor Department reported that new claims for jobless benefits jumped last week. Claims have been stuck above 450,000 since the beginning of the year, raising concerns that jobs remain scarce as the economy recovers from the worst recession since the 1930s.

The auto industry's struggles could be good news for some consumers. Analysts say if the month-to-month declines continue, automakers will be tempted to expand sales promotions such as low-cost leases, zero-percent financing and cash rebates. That wasn't the case, though, in June, according to the Edmunds.com automotive website. Automakers averaged $2,661 in deals per vehicle last month, down $36 from May.

Sales of General Motors Co., Ford Motor Co. and Chrysler Group cars and trucks fell between 12 and 13 percent from May. Toyota, Subaru and Honda were also down, but Hyundai bucked the trend with a slight gain in May.

"Recent economic news continues to point to a slow recovery with some volatility in it," said Steve Carlisle, GM's head of global product planning.

Carlisle pointed to declines in fleet sales as a major reason for the slowdown from May to June. Those sales, which go to bulk buyers such as the government and rental agencies, bring in less money than sales to individuals. GM sold 25,000 fewer vehicles to fleets in June.

Car sales to individuals often slow down from May to June, as deals during the long Memorial Day weekend bring in customers that might have bought cars the following month. Automakers are still predicting a gradual recovery in the last half of the year, and said they weren't too concerned about the slowdown.

Sales of GM's four core brands _ Chevrolet, Buick, GMC and Cadillac _ rose 36 percent over June of last year, helped by strong demand for crossovers and some recovery in pickups. Still, last June was a relatively weak month as GM headed into bankruptcy protection and the industry was in the midst of its worst annual sales in 30 years.

Ford's overall sales increased 15 percent over last June. Sales of its new F-Series Super Duty pickup rose 58 percent from a year earlier, although sales its top-selling F-Series pickup fell 7 percent from May.

Chrysler said all four of its brands saw gains from June of 2009. But sales fell 12 percent from May and the company conceded that there are signs of economic weakness.

"While there is data that shows the economy is starting to recover, credit is not flowing as freely as it used to, unemployment figures are still a concern for many families in the United States, and consumers are being prudent with their purchases," Chrysler said in a statement.

Other automakers reporting Thursday:

_ Hyundai Motor Corp. reported a 4 percent increase from May and a 35 percent jump from June of last year, helped by sales of its midsize Sonata sedan.

_ Subaru's U.S. sales fell about 9 percent from May.

_ Honda Motor Co.'s U.S. sales slipped 9 percent from May but rose 6 percent over June of last year. The Civic compact and Acura MDX crossover led Honda's June sales.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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