Data: J.D. Power; Chart: Naema Ahmed/Axios 

U.S. auto sales, which tanked at the end of March amid widespread stay-at-home orders, have been steadily recovering, fueled by strong demand for trucks and generous incentives like 0% loans and deferred payments.

Why it matters: As economists debate the shape of a U.S. economic recovery, auto sales could be an important barometer. The auto industry represents about 3% of GDP, and a healthy rebound in car and truck sales could be encouraging for other consumer sectors.

What's happening: The week ending May 10 was the sixth consecutive week of improving vehicle sales at auto dealerships, according to analysts at research firm J.D. Power.

  • Between May 4 and May 10, dealership sales were down 26% from J.D. Power's pre-virus forecast, an improvement of four percentage points from the week ending May 3.
  • It's a far cry from the 59% plunge seen during the week ending March 29, when the pandemic was just beginning to shut down parts of the country. In some virus hot spots, like New York and Detroit, auto sales came to a virtual stop during the last week in March, according to J.D. Power.

Driving the news: With consumers confined to their homes, carmakers have bent over backwards to accommodate shoppers whose leases are expiring or who need to buy cars in a hurry.

Between the lines: Pent-up demand and big incentives account for much of the sales recovery.

  • Some brands are offering 0% interest rates on 7-year loans, and waiving payments for buyers experiencing financial distress.

Flashback: After 9/11, GM's "Keep America Rolling" plan — 0% interest on all cars and trucks — jump-started U.S. auto sales and the entire economy.

Yes, but: incentives can be an addictive drug.

  • If carmakers get too aggressive in their efforts to stimulate demand, they could cripple their pricing power for years to come, writes Boston Consulting Group's Karen Lellouche Tordjman in a new report.
  • After the global financial crisis of 2008, carmakers doled out big discounts, kicking off a price war that hurt the industry's profit margins for years, she wrote.

What to watch: The biggest worry now is low inventory levels in many parts of the country.

  • Factories stopped production in mid-March and are just now starting to make cars again. The ramp-up will be slow to ensure worker safety.
  • GM and others say they'll focus on replenishing dealer stocks in markets where sales have been strongest, like Texas and Arizona.

The bottom line: It's clear the auto industry's 10-year boom has ended, but the landing might not be as rough as many had feared.

  • J.D. Power is now forecasting auto sales of 13.5 million to 14.5 million for 2020, down from their previous forecast of 16.8 million.

Go deeper

GM's high-stakes electric move

The Cadillac Lyriq. Image courtesy of Cadillac

Cadillac on Thursday unveiled the Lyriq, the luxury brand's first all-electric model and GM's first consumer electric vehicle unveil since the Chevy Bolt several years ago.

Why it matters: It's the first reveal by GM of an electric vehicle that will use the company's new modular platform and Ultium battery system — technologies meant to underpin the 20 electric vehicles that GM plans to launch by 2023.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 19,648,084 — Total deaths: 727,024 — Total recoveries — 11,941,723Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 4,998,105 — Total deaths: 162,425 — Total recoveries: 1,643,118 — Total tests: 61,080,587Map.
  3. Politics: Trump signs 4 executive actions on coronavirus aid — Democrats, and some Republicans, criticize the move
  4. Public health: Fauci says chances are "not great" that COVID-19 vaccine will be 98% effective — 1 in 3 Americans would decline COVID-19 vaccine.
  5. Science: Indoor air is the next coronavirus frontline.
  6. Schools: How back-to-school is playing out in the South as coronavirus rages on — Princeton, Johns Hopkins, Howard to hold fall classes online.
Updated 4 hours ago - World

Brazil coronavirus death toll tops 100,000 and case numbers surpass 3 million

Brazilian President Jair Bolsonaro posted a photo of himself to Facebook congratulating his soccer team, Palmeiras, for winning the state title Saturday, moments after the health ministry confirmed the national COVID-19 death toll had surpassed 100,000.

Why it matters: Brazil is only the second country to confirm more than 100,000 deaths from the coronavirus. On Sunday morning, it became the second country to surpass 3 million cases, per Johns Hopkins. Only the U.S. has reported more. Bolsonaro has yet to address the milestones. He has previously tested positive for COVID-19 three times, but he's downplayed the impact of the virus, which has crippled Brazil's economy.

Editor's note: This article has been updated with the latest coronavirus case numbers and more context.