The nation’s economy is shaky, at best. Millions of Americans are unemployed or left to wonder if their homes will ever regain the value they lost when the housing bubble burst. The unsteady state of the economy is forcing American consumers to think hard about their buying choices, and the auto industry, including the hybrid market, is being hit hard.

Toyota Motor Sales U.S.A. posted a 33.7 percent decline in sales, across all of its product lines, in August 2010. The company only sold 11,799 of the best-selling Toyota Prius model, which represents a decline of 35 percent over August 2009 and down from the 14,102 units that were sold in July 2010. Overall, Toyota Motor Sales sold 15,444 hybrid vehicles during the month of August; 13,450 were sold in the Toyota division and 1,994 in the Lexus division.

Sales of Honda’s best-selling hybrid, the Insight, were also down significantly in August 2010 with only 2,030 units sold. In August 2009, the company sold 4,226 Honda Insights. The Honda Civic Hybrid is the only vehicle to buck the declining sales trend with a modest increase of 10.4 percent, or 44 additional vehicles sold in August 2010.

The Honda CR-Z, the newest hybrid to hit the streets of America, went on sale on Aug. 23 but consumers quickly snatched up 694 units. It looks like the Honda CR-Z may be cutting into Honda Insight sales. Hybrid enthusiasts will be watching to see if CR-Z sales surpass Insight sales once the September 2010 numbers are posted.

Looking back to August 2009, the government’s Cash for Clunkers program was in full swing and many automakers had their best sales month of the entire year. The absence of the program this year obviously had a negative affect on year over year car sales, but it isn’t the only reason for the decline.

Hybrid sales are lower in August 2010, even when compared to July 2010, partly due to consumers’ continued unease with the slowing rate of the economic recovery. Some experts are predicting a double dip recession and others are predicting a second slump in housing prices. With all the doom and gloom economic news out there, it is no surprise that American consumers just aren’t buying new cars, much less spending extra for a hybrid.