(Bloomberg) -- Vehicle sales in the US are expected to fall 17.3% this year to the lowest level in a decade as semiconductor shortages and other supply-chain problems continue to hamper production.

Researcher Cox Automotive lowered its forecast to 14.4 million vehicles, citing production constraints. Despite the lower forecast, Cox believes lower auto sales belie the state of the economy because the job market and consumer demand remain strong. 

“We don’t think a recession is inevitable,” said Cox Chief Economist Jonathan Smoke. “We still have pent-up demand in retail. There are people who can’t get what they want.” 

New-vehicle inventory has risen so far this year but remains at about 25 days worth of stock. Before the Covid-19 pandemic, dealers were carrying on average close to 70 days of supply.

The only caveat, Smoke said, is that inflation fears and falling consumer confidence could slow the economy.

“The consumer is close to thinking we’re in a recession and behaving like that,” he said. “We’re on that thin line.”

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