The Conservative Cave
Current Events => Economics => Topic started by: Chris_ on August 13, 2009, 11:55:14 AM
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U.S. Economy: Sales Unexpectedly Decrease as Job Losses Mount
Aug. 13 (Bloomberg) -- Sales at U.S. retailers unexpectedly fell in July, raising the risk that consumers will keep cutting back as job losses mount and temper a recovery from the worst recession since the 1930s.
Purchases decreased 0.1 percent, the first drop in three months, as shrinking demand at department stores such as Macy’s Inc. and Wal-Mart Stores Inc. overshadowed a boost from the cash-for-clunkers automobile incentive program, Commerce Department figures showed today in Washington.
A separate government report today showed more Americans than forecast filed claims for unemployment insurance last week, underscoring the threat to spending from the continued deterioration in the job market. Treasury securities jumped and the dollar fell after the reports, and some economists lowered estimates for growth this quarter.
“Until we start seeing job growth, consumers are still going to be very cautious,†said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, which accurately forecast the drop in purchases excluding automobiles. “It’s premature to talk about the sustainability of a recovery,†he said, until there’s “follow-through on the demand side.â€
MORE (http://www.bloomberg.com/apps/news?pid=20601087&sid=aqQ7lelIST9g)
That doesn't seem to agree with "experts" from yesterday's thread:
Report: Economists Say Recession Over, Want Bernanke to Stay
http://www.conservativecave.com/index.php/topic,32076.0.html
Hmmmmm, do you suppose some of those "experts" really aren't? :o
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Hmmmmm, do you suppose some of those "experts" really aren't? :o
You're not suggesting that with THIS administration, are you?? For shame, sir.
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You're not suggesting that with THIS administration, are you?? For shame, sir.
Hey, what have I got to lose....I've already been "reported". :-)
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I look for this trend to continue. The Cash for Clunkers program has seen a huge drop off in car buyers, because many of the initial purchases were based on the belief that it would be limited.
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Sales unexpectedly decreased? They expected an increase? What world are they living in?
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I liked Dolan's comment in this weeks Barrons
A Clunker of a Policy
HERE'S NEWS: THERE IS A POPULAR GOVERNMENT program. "Cash for clunkers" combines two things Americans care about most: free money and new cars. Here's some more news: The government doesn't care if it makes sense; it's throwing another couple of billion dollars into the pot. And more: Most consumers aren't getting a bargain.
{snip}.
A person who buys a new car is not making some other purchase. Cash for clunkers takes away cash for houses, refrigerators, ishwdashers, car repairs and car parts, or anything else.
The government's buy-now policy is encouraging consumers to take on new car expenses, primarily new debt, rather than get through the recession frugally, with as few monthly payments as possible. New cars aren't ever much of a bargain anyway -- driving a car out of the showroom usually creates 20% depreciation in the first minute. A person desperate to get rid of a clunker might be better advised to buy a three-to-five-year-old car without the government's help.
{snip}
Uncle Sam the friendly car dealer is creating a temporary shortage of the most popular car models, driving up the price and canceling out the consumer's subsidy. Edmunds.com reports that its analysts estimate that dealers are enjoying a 20% increase in gross profit on average sales involving clunker trade-ins.
Unless the program never ends, dealers eventually will be left with a surplus of cars -- just as they had before the program began. The program also disrupts the parts-and-scrap markets, creating artificial surpluses and driving down the value of inventories.
The popularity of the program is undeniable -- and inexcusable. Imagine if the government paid banks to burn down unoccupied houses. Or don't imagine it; that could be next year's stimulus program.
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Editorial Page Editor THOMAS G. DONLAN receives e-mail at tg.donlan@barrons.com
:whatever:
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Sales unexpectedly decreased? They expected an increase? What world are they living in?
My thoughts exactly. What bizarro world are these "experts" living in? Are these the same experts that believed you could lend hundreds of thousands of dollars to people who could not even afford a 3% downpayment on a house?