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Recession-hit automakers brace for grim US sales
AP Economics Writer
WASHINGTON — Walloped by the recession, automakers' U.S. sales are plummeting as hard-to-get credit, job losses and other stresses make many Americans wary of taking on big-ticket financial commitments.
Auto sales for November, released Tuesday, are expected to show a drop of 36 percent from a year ago to a seasonally adjusted annualized rate of 10.2 million vehicles, according to Joseph Amaturo, analyst at Buckingham Research. Those sales figures would include the Big Three Detroit car makers as well as foreign companies that sell vehicles in this country.
Federal Reserve Chairman Ben Bernanke speaks during a luncheon of the Austin Chamber of Commerce Monday, Dec. 1, 2008, in Austin, Texas. He said that further interest-rate cuts are 'certainly feasible,' but he warned there are limits to how much such action would revive an economy likely to stay weak well into next year. (AP Photo/Harry Cabluck)
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Later Tuesday, General Motors Corp., Ford Motor Co. and Chrysler LLC will provide a skeptical Congress with details about their long-term viability plans. The U.S. auto companies are desperately trying to secure $25 billion in fresh government loans to help them survive the economic carnage. They insist that bankruptcy isn't an option, even as companies burn through cash and bleed jobs.
The auto industry's plight comes under an intense spotlight just one day after the United States got some grim news of its own: The economy has been stuck in a recession since December 2007.
Most Americans sorely knew it already, but it became official on Monday with the determination from the National Bureau of Economic Research.
With the decision by the NBER, a group of academics, the United States has fallen into two recessions during President George W. Bush's eight years in office. The first one started in March 2001 and ended in November of that year.
The economy jolted into reverse in the final three months of last year. After a short spring rebound, it contracted again in the summer. Economists say it is still shrinking and will continue to do so through at least the first quarter of next year.
Unlike some past recessions, consumers are bearing the brunt of this one. Clobbered by vanishing jobs, the credit crunch and hits to their wealth from sinking home values and plunging portfolio investments, consumers have cut back sharply on their spending, which accounts for two-thirds of all economic activity.
Watching customers' appetites wane, employers have throttled back on hiring. The unemployment rate in October zoomed to 6.5 percent, a 14-year high. So far this year, 1.2 million positions have disappeared. The jobless rate is likely to climb to 8 percent or higher next year.
Against that backdrop, many economists believe the current recession will be the worst since the 1981-82 downturn.
With the economic pain likely to stretch well into 2009, Federal Reserve Chairman Ben Bernanke said Monday he stands ready to lower interest rates yet again and to explore other rescue or revival measures.
The Fed's key interest rate now stands at 1 percent, a level seen only once before in the past half-century, and many economists predict Bernanke and his colleagues will drop the rate again at their next meeting on Dec. 15-16.
The Fed can lower its key rate only so far — to zero — and it's getting ever closer. Given that constraint, Bernanke said there are other ways to bolster economic activity.
For instance, the Fed could buy longer-term Treasury or agency securities on the open market in substantial quantities, he said. This might lower rates on these securities, "thus helping to spur aggregate demand," Bernanke said.
Rushing in reinforcements, Treasury Secretary Henry Paulson, who along with Bernanke has been leading the government's efforts to stem the worst financial crisis since the 1930s, pledged to take all the steps he can in the waning days of the Bush administration to provide relief. Specifically, Paulson is eyeing more ways to tap into a $700 billion financial bailout pool.
On Capitol Hill, House Speaker Nancy Pelosi, D-Calif., vowed to have a massive economic stimulus package ready on Inauguration Day for President-elect Barack Obama's signature.
That measure — which could total a whopping $500 billion — would bankroll big public works projects to generate jobs, provide aid to states to help with Medicaid costs and provide money toward renewable energy development. Crafting such a colossal recovery package would mark a Herculean feat: Congress convenes Jan. 6, giving lawmakers just two weeks to complete their work if it is to be signed on Jan. 20.
Bush, in an interview with ABC's "World News," expressed remorse about lost jobs, cracked nest eggs and other damage wrought by the financial crisis. "I'm sorry it's happening, of course," he said.
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AP Auto Writer Tom Krisher contributed to this report from Detroit.
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Copyright 2008, The Associated Press. The information contained in the AP Online news report may not be published, broadcast or redistributed without the prior written authority of The Associated Press.Have fun
An Excuse to Celebrate
December 2
Today is St. Bibiana's Day. Don't know who she is? You probably just forgot because St. Bibiana is a the patron saint of drunks and hangovers. What better way to honor her than by heading to the bars? Bars and clubs guide »
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Here's where you get to tell the world what you think. Every week you get to vote on the best that the Dayton area has to offer in entertainment, restaurants, recreation & and a few other bizarro categories.
Voting in this category ends on Dec. 8.
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- The Dan Rivers Acoustic Open Mic Show at Bargos Grill
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Holiday events to get on your radar … and we're not just talking Christmas lights here [things to do]
There's never a shortage of holiday events in the area to occupy your time until the New Year rings itself in. This year, all the usual suspects are present — Woodland Lights, RiverScape ice skating, Lebanon's Carriage Parade — with a couple of brand new additions to the mix, including 50 Under $50, a collaborative collection of area artists, getting together for a Friday/Saturday shopping and entertainment experience at 20 N. Jefferson St. downtown this weekend, the same place the recent Dayton LadyFest made its mark; Sandstorm Middle-Eastern Dance Company's Ho Ho Hafla — a holiday show like no other; and a pub crawl for a good cause. More »
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'Australia'[movies]
A big action adventure with big, big stars Nicole Kidman and "Sexiest Man Alive" Hugh Jackman. Set in Australia (duh) on the brink of World War II, the plot follows English aristocrat Kidman and cattledriver Jackman as they fight to save the land she inherited. More »
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Wine & Dine: More local restaurants are offering wine tasting/dinner pairings [review]
Some are searching for new customers. Others are looking for a test market for new appetizers or entrees. Others want customer feedback on which new wines to add to the wine list. Whatever their reasons, more restaurants in the Dayton area are using wine tastings and wine dinners to try to get new, fresh faces to cross their doorsteps. A decade ago, diners could easily count on one hand the number of restaurants that held regular wine events. Now, the number exceeds a dozen and is growing. More »
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