As Japan stares in the abyss, things are looking up for the U.S. auto market. Traffic at dealers is up, people are buying, cautiously. Based on transaction data from more than 8,900  dealers in the U.S., J.D.Power projects that this October will be the year’s strongest month –but not by a whole lot.

Based on the numbers they have so far, J.D.P. sees total light-vehicle sales in October at 922,700 units, 14 percent higher than October 2009. Fleet sales in October are expected to be up 3 percent from one year ago, representing an 18 percent share of total sales.  Power thinks total SAAR will be 11.9m units, up slightly from 11.7m units in December, and up 1.5m units from the dark days of October 2009.

Jeff Schuster of J.D.P. detects signs of strengthening consumer sentiment, despite all odds: “Despite the drag from high unemployment and lower incentive levels, improvement in the automotive market continues in October, suggesting that consumers are discounting the negative sentiment.”

J.D. Power and Associates U.S. Sales and SAAR Comparisons

What is interesting is the resurgence or retail sales. October is typically a month with a lower level of fleet sales, but this October fleet volume looks like the lowest of the year.

For the year, J.D.P. sees only tepid growth. They revised their total sales outlook  for 2010 down to 11.5m units, a bit less than previously thought 11.6m.