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The S&P 500 on Thursday capped its worst six-month start to a year since 1970.
Some 68% of chief financial officers expect a recession to occur during the first half of 2023, according to a CNBC survey.
Experts suggest diversifying your portfolio, including bonds despite falling prices, and adding to cash reserves.

Phonlamaiphoto | Istock | Getty Images

Months of stock market volatility, surging inflation and rising interest rates have left many investors wondering if a recession is coming. 
The stock market tumbled again on Thursday, with the S&P 500 capping its worst six-month start to a year since 1970. In all, it’s down more than 20% year to date. The Dow Jones Industrial Average and Nasdaq Composite are also down significantly since the beginning of 2022, dropping more than 15% and nearly 30%, respectively.

Meanwhile, consumer feelings about the economy have plummeted, according to the University of Michigan’s closely-watched Survey of Consumers, measuring a 14.4% decline in June and a record low for the report.
More from Personal Finance:Inflation is making Fourth of July celebrations more expensive than ever’It’s like going to the DMV online’: How to buy Series I bondsHere are 3 ways to deal with inflation, rising rates and your credit 
Some 68% of chief financial officers expect a recession to occur during the first half of 2023, according to CNBC’s CFO survey. However, expert forecasts vary about the possibility of an economic downturn.

“We all understand that markets go through cycles and recession is part of the cycle that we may be facing,” said certified financial planner Elliot Herman, partner at PRW Wealth Management in Quincy, Massachusetts.
However, since no one can predict if and when a downturn will occur, Herman pushes for clients to be proactive and make sure their portfolio is ready.

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Diversify your portfolio

Diversification is critical when preparing for a possible economic recession, said Anthony Watson, a CFP and founder and president of Thrive Retirement Specialists in Dearborn, Michigan.
You can reduce company-specific risk by opting for funds rather than individual stocks because you’re less likely to feel a company going bankrupt within an exchange-traded fund of 4,000 others, he said.

Value stocks tend to outperform growth stocks going into a recession.

Anthony Watson
Founder and president of Thrive Retirement Specialists

He suggests checking your mix of growth stocks, which are generally expected to provide above-average returns, and value stocks, typically trading for less than the asset is worth.     
“Value stocks tend to outperform growth stocks going into a recession,” Watson explained.
International exposure is also important, and many investors default to 100% domestic assets for stock allocations, he added. While the U.S. Federal Reserve is aggressively fighting inflation, strategies from other central banks may trigger other growth trajectories.

Revisit bond allocations

Since market interest rates and bond prices typically move in opposite directions, the Fed’s rate hikes have sunk bond values. The benchmark 10-year Treasury, which rises when bond prices fall, topped 3.48% on June 14, the highest yield in 11 years. 
Despite slumping prices, bonds are still a key part of your portfolio, Watson said. If stocks plummet heading into a recession, interest rates may also decrease, allowing bond prices to recover, which can offset stock losses.
“Over time, that negative correlation tends to show itself,” he said. “It’s not necessarily day to day.”

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Advisors also consider duration, which measures a bond’s sensitivity to interest rate changes based on the coupon, time to maturity and yield paid through the term. Generally, the longer a bond’s duration, the more likely it may be affected by rising interest rates.
“Higher-yielding bonds with shorter maturities are attractive now, and we have kept our fixed income in this area,” Herman from PRW Wealth Management added.

Assess cash reserves

Amid high inflation and low savings account yields, it’s become less attractive to hold cash. However, retirees still need a cash buffer to avoid what’s known as the “sequence of returns” risk.
You need to pay attention to when you’re selling assets and taking withdrawals, as it may cause long-term harm to your portfolio. “That is how you fall prey to the negative sequence of returns, which will eat your retirement alive,” said Watson at Thrive Retirement Specialists.
However, retirees may avoid tapping their nest egg during periods of deep losses with a significant cash buffer and access to a home equity line of credit, he added.

Of course, the exact amount needed may depend on monthly expenses and other sources of income, such as Social Security or a pension. 
From 1945 to 2009, the average recession lasted 11 months, according to the National Bureau of Economic Research, the official documenter of economic cycles. But there’s no guarantee a future downturn won’t be longer.
Cash reserves are also important for investors in the “accumulation phase,” with a longer timeline before retirement, said Catherine Valega, a CFP and wealth consultant at Green Bee Advisory in Winchester, Massachusetts.

I do tend to be more conservative than than many because I have seen three to six months in emergency expenses, and I don’t think that’s enough.

Catherine Valega
Wealth consultant at Green Bee Advisory

“People really need to make sure that they have sufficient emergency savings,” she said, suggesting 12 months to 24 months of expenses in savings to prepare for potential layoffs.
“I do tend to be more conservative than many,” she said, noting the more widely-touted suggestion of three to six months of expenses. “I don’t think that’s enough.”
With extra savings, there’s more time to strategize your next career move after a job loss, rather than feeling pressure to accept your first job offer to cover the bills.
“If you have enough in liquid emergency savings, you are providing yourself with more options,” she said.

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The rate of flight cancellations and delays is higher this year than before the pandemic thanks to bad weather and staffing shortages.
Some airlines have trimmed their schedules to give themselves more wiggle room.

The Fourth of July holiday weekend will put airlines to the test after a messy spring angered travelers and drew sharp criticism from Washington.
Already this year, the rate of flight cancellations and delays in June was higher than before the pandemic as a result of bad weather and staffing shortages. And airlines and federal officials have been scrambling to ease frustrations ahead of the busy holiday weekend.

This week, Delta took the unusual step of allowing travelers to change flights for free, without paying a difference in fare, if they can fly outside of the busy July 1-4 weekend, if they can travel anytime through July 8. JetBlue Airways offered attendance bonuses for flight attendants this spring to ensure solid staffing. American Airlines regional airline Envoy is offering pilots triple pay to pick up extra trips through July.

Travelers at LaGuardia Airport in New York on June 30, 2022.
Leslie Josephs | CNBC

And carriers including Delta, Spirit , JetBlue, Southwest and United recently trimmed their schedules to give themselves more wiggle room for when things go wrong.
The moves come as fares have soared and passenger counts near pre-pandemic levels. About 2.6 million people could depart U.S. airports each day of the weekend, according to estimates from the fare-tracker Hopper.

Travelers have largely been willing to pay the higher fares after being cooped up for two years in the pandemic. That’s been a boon for carriers that are more than making up for a surge in fuel costs. But flying is turning out to be a headache for many.
Nearly 176,000 flights arrived at least 15 minutes late between June 1 and June 29. That represents more than 23% of scheduled flights, according to flight-tracker FlightAware. And more than 20,000 − nearly 3% − were canceled.

That’s up from 20% of flights being delayed and 2% being cancelled in the same period of 2019.
By late Friday afternoon, 425 U.S. flights were canceled and more than 4,500 were delayed. The delays included more than 600 American Airlines flights, or 18% of the carrier’s mainline schedule for the day, and 450 Delta flights, 14% of the airline’s schedule, according to tally from FlightAware.
Consumer complaints are piling up. In April, the latest available data, the Transportation Department received 3,105 from travelers about U.S. airlines, up nearly 300% from April 2021, and at nearly double the rate during the same period last year.
Airlines and the Federal Aviation Administration have sparred over who’s to blame. Airlines chalk up the disruptions to bad weather, their staffing shortages and staffing problems at the government’s air traffic control.
With demand for flights to Florida rising among vacationers, airlines have complained in particular about congestion stemming from a key air traffic control center in the state that oversees planes in flight over a large swath of the Southeast.
To avoid getting caught in those delays, Frontier Airlines CEO Barry Biffle told CNBC this week that the carrier is changing how it schedules crews, limiting flying through that airspace to twice on single assignment. Flight delays tend to ripple through the rest of the network since crews arrive late for their next next flights.
The FAA, for its part, has called out moves by airlines to let go of tens of thousands of workers through buyouts, despite getting $54 billion in taxpayer payroll aid during the pandemic as a part of a rescue package that prohibited layoffs.
Space launches and military exercises are other obstacles.
Political pressure on airlines is rising. Transportation Secretary Pete Buttigieg has repeatedly urged airlines to ensure they are ready for the summer travel season and to reduce disruptions after the recent spate of cancellations and delays, including one that affected a flight the secretary planned to take. Sen. Bernie Sanders (D-Vt.) also this week said airlines should be fined $55,000 per passenger for cancelling flights they know they cannot staff.
On Thursday, the FAA’s acting Administrator Billy Nolen and other top agency officials held a call with airline executives to discuss weekend planning, including the agency’s use of overtime to staff its facilities, traffic and routing plans, according to a person familiar with the meeting. The call was in addition to regular planning meetings with airlines.

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Kohl’s might not be selling its business after all. But it’s now looking to sell some of its real estate.
This reverses a prior stance that the retailer had against so-called sale-leaseback transactions.
Kohl’s for months has been pressured by activist firms including Macellum Advisors to consider a sale of the company, in large part to unlock the value tied up in Kohl’s real estate.
“It’s no secret that Kohl’s has a very big asset on the balance sheet: Real estate,” Kohl’s board chair Peter Boneparth told CNBC.

People walk near a Kohl’s department store entranceway on June 07, 2022 in Doral, Florida.
Joe Raedle | Getty Images

Kohl’s might not be selling its business after all. But it’s now looking to sell some of its real estate, reversing its prior stance.
The retailer on Friday announced it terminated deal talks with The Vitamin Shoppe owner Franchise Group, confirming CNBC’s reporting from Thursday evening. Instead, Kohl’s said, it will continue to operate as a standalone public company.

Kohl’s for months has been pressured by activist firms including Macellum Advisors to consider a sale of the company, in large part to unlock the value tied up in Kohl’s real estate.

Macellum has argued that Kohl’s should sell some of its real estate and lease it back as a way to unlock capital, particularly during tough times. Kohl’s, however, has been resistant to so-called sale leaseback transactions, at least at such a large scale.
The company did complete a small sale-leaseback deal earlier on in the Covid pandemic, according to Peter Boneparth, chair of Kohl’s board. It recognized a gain of $127 million by selling and leasing back its San Bernardino e-commerce fulfillment and distribution centers.
On Friday, though, Kohl’s explicitly noted in its press release that its board is currently reevaluating ways that the retailer can monetize its real estate. Franchise Group had been planning to finance a portion of its Kohl’s acquisition by selling a chunk of Kohl’s real estate to another party and then leasing it back. This likely gave Kohl’s an idea of what sort of value it could fetch for its owned bricks-and-mortar stores and distribution centers.
“Now you’ve got an environment where financing has changed so much that it may in fact be more attractive to use real estate as a monetization vehicle,” Boneparth told CNBC in a phone interview.

“When you combine that with what we think the levels of the stock are, it becomes a much different exercise than it was in a previous financing environment,” he explained. “It’s no secret that Kohl’s has a very big asset on the balance sheet: Real estate.”
As of Jan. 29, Kohl’s owned 410 locations, leased another 517 and operated ground leases on 238 of its shops. All of its owned real estate was valued at a little more than $8 billion at that time, an annual filing shows.

Pros and cons

Proponents of sale-leaseback deals argue it’s a convenient way for companies to come up with funds to put toward future growth, so long as there is a buyer for the real estate. But it also leaves the seller with having to meet lease obligations since they would be renting the property they just sold.
Those leases could become much more difficult to break and rents can fluctuate across markets. Kohl’s said in its annual filing that a typical store lease has an initial term of 20 to 25 years, with four to eight five-year renewal options.
In 2020, Big Lots reached a deal with private-equity real estate firm Oak Street to raise $725 million from selling four company-owned distribution centers and leasing them back. It gave the big-box retailer additional liquidity during near the onset of the Covid-19 pandemic.
Also in 2020, Bed Bath & Beyond completed a sale-leaseback transaction with Oak Street, in which it sold about 2.1 million square feet of commercial real estate and netted $250 million in proceeds. Mark Tritton, the Bed Bath CEO at the time, touted the deal as a move to raise capital to invest back in the business. Now, though, Bed Bath is facing another cash crunch as its sales slump and Tritton was ousted from his role earlier this week.
Oak Street had been planning to offer financing to Franchise Group in a Kohl’s deal, CNBC previously reported, according to a person familiar with the discussions. A representative from Oak Street didn’t respond to CNBC’s request for comment.
Kohl’s on Friday reaffirmed its plan to conduct a $500 million accelerated stock buyback later this year. It reduced its revenue guidance for the fiscal second quarter, citing a recent softening in consumer demand amid decades-high inflation.
“Clearly the the consumer is under even more pressure today,” Kohl’s CEO Michelle Gass told CNBC in a phone interview. “We’re not immune to that … but Kohl’s stands for value. And at times like this it’s more important than ever to amplify that message.”
She added that Kohl’s partnerships with Amazon and Sephora remain in place and part of the company’s longer-term strategy to win over new customers.
“The conclusion of the board process was absolutely the right answer,” she said.
Kohl’s shares ended Friday trading down nearly 20% and at one point touched a new 52-week low of $27.65. Shares of Franchise Group ended the day down 7.5% and also touched a new 52-week low of $31.67 during trading.
Macellum didn’t respond to CNBC’s request for comment.

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Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to Digital World Acquisition Corp.
The filing came days after DWAC said government probes could delay or even prevent its merger with Trump’s newly formed company.
The Trump firm also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

Former U.S. President Donald Trump gives the keynote address at the Faith & Freedom Coalition during their annual “Road To Majority Policy Conference” at the Gaylord Opryland Resort & Convention Center June 17, 2022 in Nashville, Tennessee.
Seth Herald | Getty Images

Donald Trump’s media company was subpoenaed by a federal grand jury in connection with a criminal probe, according to the company with which the former president’s firm plans to merge.
Digital World Acquisition Corp. said in a filing Friday that Trump Media and Technology Group received a subpoena from the grand jury in Manhattan on Thursday. The Trump company also received a subpoena from the Securities and Exchange Commission regarding a civil probe on Monday, DWAC said.

DWAC also said some current and former TMTG employees have also recently received grand jury subpoenas. Later Friday, TMTG said it would comply with the subpoenas, and that none of them were directed at its chairman, Trump, or CEO, former U.S. Rep. Devin Nunes.
The filing came days after DWAC said the government investigations could delay or even prevent its merger with Trump’s newly formed company, which includes Truth Social, a social media app intended to be an alternative to Twitter.
Neither TMTG nor a spokeswoman for Trump immediately responded to CNBC’s requests for comment.
The Justice Department and the SEC, which regulates the stock market, are investigating the deal between DWAC and Trump Media. By merging with DWAC, which is a kind of shell company called a special purpose acquisition company, or SPAC, Trump’s firm would gain access to potentially billions of dollars on public equities markets.

Trump established Truth Social months after Twitter banned him for his tweets on Jan. 6, 2021, when hundreds of his supporters stormed the U.S. Capitol in a bid to overturn Joe Biden’s victory in the presidential election.

Trump Media’s CEO, Nunes, is one of the former president’s most ardent loyalists in the Republican Party. Trump is also considering whether to run for president in the 2024 election.
Trump has continued to spread the lie that the election was stolen from him. His alleged involvement in the Jan. 6 insurrection is being probed by a House select committee that has accused the former president of being at the center of a multipronged conspiracy to block the peaceful transfer of power to Biden.
Early criticism of the Trump-DWAC deal came from Sen. Elizabeth Warren, D-Mass. In calling for an investigation, she wrote to SEC Chair Gary Gensler in November, telling him that DWAC “may have committed securities violations by holding private and undisclosed discussions about the merger as early as May 2021, while omitting this information in [SEC] filing and other public statements.”
DWAC shares are far off their highs, closing Friday at $24.20. The stock had surged above $90 in October, after the deal with Trump’s group was announced.
DWAC on Monday revealed in a securities filing that it learned June 16 that each member of its board of directors received subpoenas from the same federal grand jury.
The grand jury sought documents similar to those the SEC already requested as part of its civil probe, DWAC said. The company itself was served with a subpoena a week ago with similar requests, along with other requests relating to communications, individuals and information involving Rocket One Capital.
DWAC also revealed Monday that a board member, Bruce J. Garelick, had told management that he would quit the board during the previous week. Garelick said his resignation “was not the result of any disagreement with Digital World’s operations, policies or practices,” according to the company filing.
— CNBC’s Kevin Breuninger and Thomas Franck contributed to this story.

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The Biden administration released a five-year plan on Friday that would block all new offshore oil drilling in the Atlantic and Pacific oceans, while allowing some drilling in the Gulf of Mexico and the south coast of Alaska.
The proposed plan, which has not been finalized, could allow up to 11 lease sales over the next five years. It also includes an option for the administration to conduct no sales.
The Department of the Interior is inviting the public to comment on the program.

An oil and gas drilling platform stands offshore as waves churned from Tropical Storm Karen come ashore in Dauphin Island, Alabama, October 5, 2013.
Steve Nesius | Reuters

The Biden administration released a five-year offshore oil and gas drilling development plan on Friday that would block all new drilling in the Atlantic and Pacific Oceans within U.S. waters, but would allow some lease sales in the Gulf of Mexico and the south coast of Alaska.
The proposed plan, which has not been finalized, could allow up to 11 lease sales over the next five years. It also includes an option for the administration to conduct no sales. The Department of the Interior is inviting the public to comment on the program.

Biden had vowed to suspend all new federal drilling on public lands and waters, but that position resulted in legal challenges from several Republican-led states and the oil sector.
As U.S. energy prices rise, the fossil fuel sector has urged the administration to increase offshore drilling in an effort to lower gas prices at the pump. But climate groups have argued that new lease sales would exacerbate climate change while doing nothing to bring down prices.
A recent report published by Apogee Economics and Policy said that a temporary suspension in new offshore oil and gas sales would have minimal impact on gas prices for consumers — with prices edging up by less than 1 cent per gallon over the next nearly two decades.

More from CNBC Climate:

“From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy,” Interior Secretary Deb Haaland said in a statement on Friday. “Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing.”
The Interior’s most recent offshore oil and gas auction was in November in the Gulf of Mexico. A court order later vacated the sale, arguing the administration didn’t adequately account for the harm to the environment and impact on climate change.

Nearly 95% of U.S. offshore oil production and 71% of offshore natural gas production occurs in the Gulf of Mexico, according to the Natural Resources Defense Council. Roughly 15% of oil production in the U.S. comes from offshore drilling.

More from CNBC Climate:

Environmental groups on Friday condemned the administration for proposing limited new lease sales instead of announcing a ban on all new drilling.
“The Biden administration had an opportunity to meet the moment on climate and end new offshore oil leasing in Interior’s five-year program,” said Drew Caputo, vice president of litigation at Earthjustice. “Instead, its proposal to serve up a bunch of new offshore oil lease sales is a failure of climate leadership and a breach of their climate promises.”
Environmental groups have also argued that new leasing would impede the White House’s goal to slash carbon emissions by at least 50% by 2030 in an effort to keep global warming under 1.5 degrees Celsius.
“This draft plan falls short of what we desperately need: an end to new oil and gas drilling in federal waters,” Food & Water Watch Executive Director Wenonah Hauter said in a statement. “President Biden has called the climate crisis the existential threat of our time, but the administration continues to pursue policies that will only make it worse.”

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Walmart CEO Doug McMillon said the company is weighing how to respond to a Supreme Court decision that ended the federal right to an abortion.
He sent a memo to the retailer’s employees on Friday.
The company is the nation’s largest private employer, and its headquarters is in Arkansas, a state with a so-called trigger law that went into effect after the high court’s ruling.

Walmart CEO Doug McMillon speaks at the CNBC Evolve conference November 19th in Los Angeles.
Jesse Grant | CNBC

Walmart CEO Doug McMillon told employees on Friday that the company is weighing how to respond to a Supreme Court decision that ended the federal right to an abortion.
“We are working thoughtfully and diligently to figure out the best path forward, guided by our desire to support our associates, all of our associates,” he said in a memo sent to employees on Friday. “We will share details on our actions as soon as possible, recognizing that time is of the essence.”

He did not say what changes the company is considering, such as if it may cover travel expenses for workers who must travel to another state where abortion is available.
The memo was previously reported by The Wall Street Journal.
Arkansas, home to Walmart’s headquarters, is one of several states with severe limits or bans on abortions that went into affect after the high court’s ruling.
Walmart is also the country’s largest private employer. It has about 1.6 million employees across the country, including many who live and work in states across the Sunbelt with abortion restrictions such as Texas, Oklahoma and Florida.
Since the Supreme Court reversed Roe v. Wade, companies across the country have had a mix of reactions. Some, including JPMorgan Chase, Dick’s Sporting Goods and Target, have announced new plans to cover employee travel to other states for abortions. Others, such as Kroger and Apple, said they already cover travel for medical treatments and reproductive health care. And still others have remained quiet.

Amazon, the second-largest private employer in the country, said in May that it would pay up to $4,000 in travel expenses each year for non-life-threatening medical treatments, including abortions.
Walmart already covers employee travel for some medical procedures, such as certain heart surgeries, cancer treatments and organ transplants.
Walmart health benefits cover only some abortions. According to the company’s employee handbook, charges for “procedures, services, drugs and supplies related to abortions or termination of pregnancy are not covered, except when the health of the mother would be in danger if the fetus were carried to term, the fetus could not survive the birthing process, or death would be imminent after birth.”
Plan B, an over-the-counter form of contraception, is covered only if the person gets a prescription. The pill, often called the “morning after pill,” works by preventing ovulation or preventing a fertilized egg from attaching to the womb. It can be taken after unprotected sex or when contraception fails.
Other forms of contraception are also covered with a prescription, including birth control pills, injections and intrauterine devices, or IUDs. Some anti-abortion activists also oppose IUDs because they can stop a fertilized egg from implanting in the uterus.
In Friday’s memo, McMillon said Walmart has gathered input from employees as it decides what to do. He also alluded to the size and diversity of both the company and its customer base.
“We know our associates and customers hold a variety of views on the issue, and this is a sensitive topic about which many of us feel strongly,” he said. “We want you to know that we see you, all of you. No matter what your position on this topic is, we want you to feel respected, valued and supported.”

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Danny Meyer’s SPAC and Panera Bread have called off their investment deal, citing market conditions.
In November, Panera announced it was preparing to go public again and had secured an investment from USHG Acquisition, Meyer’s special purpose acquisition company.
The merger had to be completed by Thursday, otherwise either party was free to end the deal.

Florida, Spring Hill, Nature Coast Commons, shopping mall, Panera Bread bakery.
Jeff Greenberg | Universal Images Group | Getty Images

Danny Meyer’s SPAC and Panera Bread have called off a deal to take the sandwich chain public again, citing market conditions.
In November, the parent company of the sandwich chain, Caribou Coffee and Einstein Bros. Bagels announced it was preparing to go public and had secured an investment from USHG Acquisition, Meyer’s special purpose acquisition company.

It was an unusual deal for a SPAC, which typically uses bank financing and the proceeds from an initial public offering to take privately held companies public. The planned arrangement would have exchanged shares of USHG Acquisition for the sandwich chain’s stock and allowed the company to survive a merger with Panera’s subsidiary Rye Merger.
At the time of the deal, SPACs were still booming, backed by eager investors who liked their accessibility, and the broader market was still riding high. But high-profile busts and the threat of regulation have made SPACs less popular, while the war in Ukraine, soaring inflation and recession fears have deferred many companies’ plans to go public.
The merger had to be completed by Thursday, otherwise either party was free to end the deal. On Friday, Panera delivered written notice to USHG that it would end the agreement after passing the deadline, according to a regulatory filing.
“Based on current capital market conditions, it is unlikely that an initial public offering for Panera will happen in the near term, and so we have agreed not to extend our partnership beyond its existing June 30 expiration date,” Meyer said in a statement.
The Shake Shack founder added that his SPAC will keep looking for suitable investments.

Panera went private in 2017 after JAB Holding bought the company for $7.5 billion. As a privately held company, the chain has kept investing in technology, boosting its digital sales and maintaining its reputation as a leader in the restaurant industry.
The termination is a blow to JAB, which has been trimming its portfolio over the last year. The company, which is the investment arm of the Reimann family, sold Au Bon Pain to a Yum Brands franchisee last June. Under JAB’s ownership, many Au Bon Pain locations were converted into Panera restaurants, shrinking its footprint from roughly 300 locations to 171. Then, in July, Krispy Kreme went public again after being owned by JAB since 2016.

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Before announcing its sales results, the automaker said it has about 95,000 vehicles in its inventory that were manufactured without certain components as of June 30.
Despite the problems, the company maintained its guidance for the year.
Quarterly sales were slightly better than analysts’ expectations.

The GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, March 16, 2021.
Rebecca Cook | Reuters

DETROIT – General Motors’ U.S. vehicle sales were down about 15% in the second quarter from a year ago as the automaker continues to battle supply chain issues, but showed improvement from earlier in the year.
Before announcing its sales results, the automaker said it has about 95,000 vehicles in its inventory that were manufactured without certain components as of June 30, a majority of which were built in June. Despite the problems, the company maintained its guidance for the year.

GM’s second-quarter sales were slightly better than expectations of auto analysts, who had forecast a 16% to 17% decline. Compared to the first quarter, GM’s sales of 582,401 vehicles were up by 14%, showing an improvement in the automaker’s production and supply of vehicles.
“We appreciate the patience and loyalty of our dealers and customers as we strive to meet significant pent-up demand for our products, and we will work with our suppliers and manufacturing and logistics teams to deliver all the units held at our plants as quickly as possible,” GM North America President Steve Carlisle said in a release.
GM reported its vehicle inventory to end the second quarter was about 248,000 units, down by 9.5% compared to the end of March. The automaker had about 274,000 vehicles in its U.S. inventory to end the first quarter.
GM outsold Toyota during the first six months of the year, following the Japanese automaker outselling its Detroit rival in 2021. It marked the first time since 1931 that GM wasn’t the best-selling car company in the U.S.. However, it’s something Toyota executives at the time said would be unsustainable.

Industry sales down

Automakers such as GM have been scrambling to rebuild dealer inventories that have been hit hard by production cuts amid a global shortage of semiconductor chips and other key automotive components.

The problems have caused automakers to sporadically shutter plants or slow production for weeks, if not months. The lack of production combined with strong consumer demand has caused vehicle inventories to plummet to record lows.
Since June 2021, Cox Automotive reports monthly sales volume has been stuck in a tight window, averaging 1.1 million units a month and peaking at 1.3 million in June 2021.
Automotive analysts and forecasters expect U.S. sales during the second quarter to be around 3.5 million, down between 19% and 21% from a year ago.

Other results

GM is among several major automakers scheduled to report second-quarter U.S. vehicle sales on Friday. Here are the results of others that have been released:

Toyota Motor said its second-quarter sales were down 22.9% from a year earlier to 531,105 units.
Hyundai Motor, including its luxury Genesis brand, reported second-quarter sales of 198,136 units, a 23% decline for the second quarter compared to a year earlier.
Kia’s second-quarter sales were 182,146 units, down 16.8% compared to the second quarter of 2021.
Sales of Porsche’s sports cars and SUVs were 19,487 during the second quarter, up 2.8% from a year earlier.
Mazda reported sales of 60,535 vehicles during the second quarter, down about 43% from the second quarter of 2021.

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