The Los Angeles Times asked the question only the mainstream would ask. “Wages are growing and surveys show consumer confidence is high. So why are motor vehicle sales taking a hit?” Indeed, the results reported earlier by the auto sector were the kind of sobering figures that might make any optimist wonder. Across the board, and for the fourth straight month, there was almost all negatives, some still large. Given what Q1 GDP just related, a bad month of auto sales to start Q2 is not a good sign.

The details almost do not matter at this point. Ford (F), as usual, led the declines, with sales falling again 7.1% in April year-over-year. GM sales were down nearly 6%, after analysts were figuring a milder 2% decline. FCA (Fiat Chrysler) saw its comp down 7%, too. And weakness abounded from the imports. Honda (HMC) like FCA and Ford experienced a 7% decline, while Toyota (TM) sales were down 4.4%. Even the Koreans were hit, with Hyundai reporting an 11.7% decline.

Year-to-date, total unit sales among all manufacturers are off 3.1%. Given the high of auto sales last year, it is being spun as not all that bad. A little less than record highs can’t be too concerning?

Such analysis, however, ignores the secondary effects of flagging sales. Inventories remain elevated, meaning that production must at most continue to be a significant economic drag. Worse, the risk of an actual and sustained downturn for the auto industry would continue to be very high. Thus, those for the economy as a whole would, too, since the auto sector, once its lone bright spot, continues to subtract this year whereas there is at least minor improvement in the rest of the US industrial sector.

These risks are very real given the level of incentives that carmakers are employing just to keep sales even close to the pace of 2016. JD Power reported at the end of April:

While industry retail sales pace remains high, it is being powered by elevated levels of incentive spending which pose a serious threat to the long-term health of the industry. The total value of incentives used to sell new vehicles has increased by $1.9 billion through the first four months of the year.