The Commerce Department said June 13 that overall retail sales declined 0.9 percent, a downturn much deeper than the 0.4 percent decline most economists had predicted. The most prominent reason behind the slippage: a 2.5 percent decline in sales at the nation's car lots and auto-parts stores.

Economists say the data show that the nation's economy -- and the auto industry -- remain in reasonable shape and longer-term trends are still positive. But auto dealers who are having a tough time closing the sale these days say the ultra-cheap financing programs car companies are offering have lost their potent drawing power, according to the Chicago Tribune.

Paul Taylor, chief economist for the National Automobile Dealers Association (NADA), said car sales are following the same pattern as the last two years, with year-over-year unit sales declining in the second quarter after a strong first quarter. Because consumers have been so willing to buy, Taylor said "we don't have pent-up demand for autos because we had only a mild setback last fall" in the wake of the Sept. 11 attacks.

Taylor said the dealers' association expects 2002 sales will be 16.4 million, a strong performance by historical standards. "I think we'll see slow, steady growth and get an uptick in auto sales in the fourth quarter."