05/14/2012 02:17 pm ET

Car Sales Responsible For Half Of U.S. Economic Growth In First Quarter

The strength of car sales is making some economists practically giddy.

Car sales made up half of national economic growth in the first quarter, according to data in a story by Bloomberg, accounting for half of the 2.2 percent revenue growth in the first quarter. If auto sales continue at this pace they could hit 14 million cars sold this year, according to Bloomberg.

Each dollar spent in the auto industry triggers $2.02 spend in the rest of the economy, Chad Moutray, chief economist at the National Association of Manufacturers, tells Bloomberg.

As The Huffington Post recently reported, the biggest chunk of auto sales are coming from people over 50 years old, who account for more than 62 percent of sales. Consumers older than 50 accounted for 5.6 million car sales in 2011, compared with just 1.2 million sales to consumers 18 to 34 years old, the so-called millennial generation.

The uptick in U.S. car sales helped General Motors boost first-quarter net income to $1 billion, the company said earlier this month. Sales in China are strong, too, but the company is facing a weak market in Europe.

Chrysler is also doing well. In April, Chrysler said it had its best year in 13 years. And Toyota is also rebounding, coming off two weak years in a row. The automaker's profit more than quadrupled in the first quarter as it recovered from the effects of the 2011 tsunami.

The trickle down is boosting payroll counts, increasing rail shipments, and increasing orders from glass companies, steel mills and seat makers.

Strong sales in the U.S. have historically helped automakers weather downturns elsewhere in the world. The profit margins on cars sold here are much higher than other parts of the world, so when sales are strong in the U.S. it helps even out weaker sales elsewhere.