Published: Sep 01, 2010 4:38 PM EDT
Updated: Sep 01, 2010 1:38 PM EDT

DETROIT (AP) - General Motors Co.'s August sales dipped 7 percent compared with July as fears about the shaky economy discouraged customers from buying new cars and trucks.

U.S. auto sales in July were a strong point for the economy, helping to boost consumer spending. But high unemployment and a declining stock market have made people afraid to spend money on big-ticket items.

GM's August sales also fell 25 percent from August of 2009, whensales were boosted by the government's Cash for Clunkers rebates.

GM says sales from its four remaining brands - Chevrolet, Buick, GMC and Cadillac - dropped 11 percent versus August of last year. Buick, GMC and Cadillac reported increases. But Chevrolet, the company's largest brand, slipped because of the tough comparison with August of last year, when buyers snapped up many of Chevy's small cars under the clunkers program.

All automakers report sales figures on Wednesday. Industry analysts say the numbers could fall below 1 million vehicles, making it the worst August in 27 years.

Sales in August, typically among the year's strongest months, tailed off in the final week, says Jeff Schuster, executive director of global forecasting for J.D. Power and Associates.

"There hasn't been enough horsepower behind the recovery to motivate consumers to regain their confidence and purchase vehicles at a higher rate," he says.

Also, potential buyers are having a harder time getting big discounts.

Automakers have been reluctant to increase incentives such as rebates and low-interest financing. Most car companies are making money at lower sales levels because they've cut production. They no longer need to offer cars at below break-even prices just to move them off lots.