Monday, January 18, 2010

Economic Recovery Gathers Momentum: Car Production Set to Crank Up 69% in Q1 2010

DETROIT FREE PRESS -- After a long spell of cutting production and closing plants, North American automakers are preparing to build substantially more cars as evidence mounts that the economic recovery is gathering momentum.

Collectively, the industry plans to make 2.93 million cars and trucks in North America between Jan. 1 and March 31, according to Ward’s AutoInfoBank, up 69% from 1.73 million built in the first three months of 2009 (see chart above). That’s still less than the 3.58 million vehicles assembled in the first quarter of 2008, but it is still some of the first tangible evidence the long-anticipated recovery is real.

“Despite problems we might still be having in the labor market, these planned output increases do reflect belief that we will see a significant rebound,” said Mark Perry, an economics and finance professor at the University of Michigan in Flint.

Economic data supports the notion that the battered manufacturing sector is beginning to heal. Industrial production increased for the sixth consecutive month in December. The measurement’s 4.5% growth rate for the six months ended Dec. 31, marked the largest six-month gain since early 1998, according to the Federal Reserve. Manufacturing overtime hours averaged 3.4 hours per worker in November and December, according to the Bureau of Labor Statistics, the highest since October 2008.

“The industry expects last year’s hibernation to end,” said industry analyst Sean McAlinden. “The bear will stick his nose out of the tent.”

8 Comments:

At 1/18/2010 11:23 PM, Blogger David Aitken said...

So with an unofficial unemployment or underemployment rate of around 22 percent, who's going to buy all these cars and trucks?

 
At 1/19/2010 1:32 AM, Blogger OA said...

Year over year shows improvement.

But it's important to note that per Wardsauto.com, 2009 light vehicle sales of 10.4 million units were lower than any year back to 1970. 1982 was close at 10.5 million.

For reference, in 2007, 16.5 million vehicles were sold and 17 million in 2006. So last year was only 2/3 of those recent years.

http://wardsauto.com/keydata/

The December 2009 spreadsheet has year to date data for 2009.

 
At 1/19/2010 8:32 AM, Anonymous Machiavelli999 said...

Where do you pull these numbers from David Aitken?

Honestly, every time I hear people here and at other right wing blogs discuss unemployment, everyone comes up with their own crazy numbers.

This would be another good time for Mark to stand up to some loons on his blog and explain why unemployment is reported as it is.

The U6 number is like 17% and it includes people who have jobs that are part time but who would like to work full time. I don't consider those people unemployed.

The U5 and U4 numbers include people who don't have jobs but have stopped looking for work. They are definitely unemployed, but are not considered by the Fed when making interest rate decisions because they are out of the labor supply and have no effect on wages.

The U3 number includes the pertinent unemployed labor supply and it is what makes inflation impossible.

Labor supply > Labor Demand = Falling Wages = Falling Prices

 
At 1/19/2010 8:34 AM, Blogger sethstorm said...

@David:
The remaining people in the labor force, various business/government entities, and export sales.

 
At 1/19/2010 10:37 AM, Blogger Chuck said...

The Bear is going to wake up on ground hogs day and see if more winter is in store. Of course he will check shadow stats while the groundhog prepares itself in front of a mirror for an interview on CNBC. Sunny days and green shoots?

 
At 1/19/2010 1:17 PM, Blogger OA said...

Machiavelli999 said...
Where do you pull these numbers from David Aitken?

Honestly, every time I hear people here and at other right wing blogs discuss unemployment, everyone comes up with their own crazy numbers.


Wow, if you;'re such a stickler for correcting facts you must spend your whole day correcting facts on "liberal" blogs.

You clearly know where the 22% comes from as you just mentioned the components of it. And note the "underemployment" in David's post. So you're really quibbling over the 5% coming from those who are out of the labor force. Which I think is a stretch to include myself. But please stop pretending it's just made up numbers.

 
At 1/19/2010 3:41 PM, Anonymous Machiavelli999 said...

What does "underemployment" even mean? If anything, it sounds like a liberal term.

If you are a free market absolutist who believes there is nothing wrong with deflation and falling wages can correct all unemployment, then you shouldn't believe in "underemployment". Because deflation would cause falling wages and I guess anyone with a job that pays less then they think they should be making is "underemployed".

And I still don't understand what 22% is, because U6 is 17%. So, I wonder what that extra 5% is?? People who have jobs that they don't like??

This is unemployment??

 
At 1/19/2010 4:28 PM, Anonymous Perp said...

LOL! Auto sales are at about 1982 levels despite a huge population increase since that time.

The Architectural Billings Index posted its 25th consecutive month of contraction. As someone said, U-6 is over 20%.

There will only be a couple of hundred bank failures from the impending CRE collapse.

The faux recovery is already unraveling. The best part is that every passing day it gets harder and harder for ObaPeloReid to blame Bush.

 

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