What's going on?

There a few storm clouds circling right now, but US auto sales provided investors with a reason to be optimistic on Tuesday: more cars and trucks were sold in April in the US than in any month in history � and that�s supposed to be a good sign for the US economy.

What does this mean?

Low interest rates (which allow people to cheaply borrow money to buy a car) and low gas prices have combined to create a sort of utopia for those trying to sell cars in America. This news is bigger than just auto sales though � some think it suggests that the average US person is still doing reasonably well and, crucially, is prepared to spend their hard-earned money (yes, this is contrary to some other recent news). If true, that would be a welcome boost to the economy (�consumer spending� accounts for about two-thirds of economic activity).

Why should I care?

The bigger picture: The weakening US dollar is good for US automakers � but not so good for others. The value of the US dollar is often measured against an official collection of other currencies (i.e. the Yen, the Euro, the pound and others). On Tuesday, the value of the dollar versus that collection fell to its lowest level in 15 months. A lower dollar makes it easier for US companies (like Ford) to make money because, broadly speaking, their costs are in US dollars (which are declining in value) and their international sales are in foreign currency (which are increasing in value). The opposite is true for European and Japanese automakers.

For you personally: Buying a car likely isn�t going to get much easier for Americans. With interest rates at such low levels, the interest payments required on a car loan are at historic lows. If things were to change, i.e. if interest rates were to go up for some reason, car sales are at risk of declining. So this is another area of business where interest rates have a big impact.