On Jobs and Cars

Nonfarm payrolls declined by 263,000 in September, according to the Labor Department, bringing the total jobs lost since the recession began in December 2007 to 7.6 million. The unemployment rate climbed to 9.8%. Those cheery economists, all of whom have been busy ratcheting up expectations for growth next year, were only expecting a loss of 175,000 jobs. While a job loss of 263,000 is not half bad compared to some of the horrific numbers we were seeing earlier in the year, continuing job losses of this magnitude cannot possibly support the "green shoots" crowd's hopes for a V-shaped recovery.

Car sales didn't do much to paint a rosy economic picture either. US auto sales fell 23% in September after the end of the federal government's "cash for clunkers" program. Both GM and Chrysler's sales dropped precipitously, with GM's declining by 45% and Chrysler's by 42% while Ford had a better month, with sales only declining by 5%. It's really too bad that consumers didn't feel any sense of patriotism when they were picking out their new cars. After all, the government wrote them a check. The least they could do was support their investment in GM in Chrysler by buying their cars. But it was not to be. With total car sales declining back to a 9.2 million pace, roughly in line with the numbers we were seeing before the government's program, it appears highly likely that this stimulus measure was merely a temporary blimp that did nothing to jump-start demand for the longer haul. Hard to have demand for a new car when you can't find a job.