The downgrade of U.S. debt and the 400-point swings of the Dow Jones Industrial Average last week didn’t sit well with consumers, according to CNW’s preliminary data for August. The good news is automakers are responding by boosting incentive spending. But will it be enough?

Vehicle manufacturers are now spending $3,239 per vehicle, up almost 8 percent from July. The increase is still below last August’s spending level of $3,269 per vehicle, but it is clear automakers are attempting to head off what looks to be a slowdown in consumer demand for new vehicles. 

According to CNW, the retail share of new-car sales in the opening days of August slid to about 53 percent of deliveries, the lowest level since October 2010. Floor traffic dipped 1.3 percent from July, but remained flat compared to July 2010. However, closing ratios are off nearly 11 percent in the first 10 days of August.

CNW’s Jitters Index, which measures consumer sentiment regarding home-centric economic issues, posted a massive increase versus both July and August of last year. It set a new record at 7.91 percent (on a 10-point scale), breaking last month’s highest ever score of 7.4.

Additionally, concerns about day-to-day needs jumped nearly 15 percent vs. a year ago, with concerns regarding food prices climbing more than 6 percent in the year-over-year comparison.

“Americans are seriously worried about their current economic condition,” CNW's Art Spinella added. “This month’s new-car sales are going to be wobbly at best.”

Spinella projects that August sales could reach 1.03 million, which would be down 0.8 percent for CNW’s august data. That would put the retail sales at 11 million units this year. The hope is that a pickup in incentive spending will have the same effect as it did for the month of July.

A 3.6 percent increase in incentives during the second half of July helped turn around what looked to be a serious slowdown in showroom traffic. However, the 6.89 percent jump on this month’s Jitters Index could mean that incentives might not be enough to keep consumers in a buying mood.

The good news is that used sales remained strong during the first 10 days of August, with numbers slightly above last year. Compared to August, used sales are likely to increase 3 percent, according to CNW. Additionally, used-vehicle sales at franchised and independent dealers are up by more than 8 percent and 4 percent, respectively.

Auto finance, so far, has been a mixed bag. Representing 11 .5 percent of likely August new-car sales, subprime is on the verge of registering another decline in overall share of buyers. The good news is that nearprime buyers are on track to reach 13 percent of new-car sales, the highest level of the year.

“Some of the metrics continue to be small glimmers of hope,” wrote Spinella. “Subprime approvals are off from last month, but remain significantly ahead of year-ago numbers. Used-car sales also remain strong even though inventories remain short of the most popular vehicle shoppers want.”