General Motors last week reported the biggest loss ever by a U.S. car maker. That got me thinking about car sales trends here in Washington state. I took a look at state sales tax records to gauge the health of the sector. Turns out the third quarter is the peak for car sales each year, which is convenient for us, because the third quarter '07 sales tax report is the most-recent one available.

Car sales are a very big part of the retail economy. New and used cars sales accounted for 14.8 percent of all retail sales in Washington in the most-recent quarter. Throw in the spare parts and new tires we need to keep our rides on the road (like the $500 I spent on a new wheel and tire after running over a huge bolt on State Route 99 last month) and you're talking about 16.9 percent - meaning that about one out of every six dollars we spend goes to our cars, some $4.89 billion in the most-recent quarter.

Overall, it seems that car sales are flat. Statewide, sales of new and used cars fell 0.5 percent during Q3 '07, compared to the year before. That's consistent with what we know about general economic conditions - the national economy began unraveling in earnest last fall. And as car sales slow, it logically follows that we'd spend more on spares and tires. Sure enough, that total was up 1.1 percent, to $622 million.

As we discussed last week, car dealers in some of the eastern Washington farm country saw serious sales booms last fall, fueled by record crop prices: Grant County was up 21.2 percent; Lincoln County was up a whopping 30.7.

But those farm-country buyers are only a fraction of the state's total. More than a third of car sales (37.2 percent) take place in King, Pierce and Snohomish counties. And - at least as measured by retail sales value - those numbers were down in each county between 2.5 and 3.5 percent.

So car sales are down and we're in a big slump and that's a sign of the pending recession, right? Well ... not so fast. Even though sales were down compared to Q3 '06, the third quarter of 2007 was still a better-than average sales year for most parts of the state.

Let's take the average third-quarter sales for new and used cars over the past five years. Statewide, it was $4.15 billion. Q3 '07s total was $4.26 billion - or 2.8 percent better than that average. (That's car sales only, not the cars, parts and tires total we discussed above.)

Similarly, the Big Three counties (King, Pierce and Snohomish) were also all above the average - Snohomish was up 4.3 percent, in fact. Across the mountains, Spokane was up too; Benton and Franklin counties, however, were down.

What we're seeing in the Q3 '07 numbers is a downward slide from remarkable highs recorded in 2005-'06. Statewide, sales jumped 7.6 percent between Q3 '04 and Q3 '05, and stayed up in Q3 '06. So while dealers have lost some ground, 2007 still was a superior year. Instead of falling into a pothole, it would appear that car sales in Washington are settling down to more-normal levels.