Recession News Is A Mixed Bag

May 15, 09 Recession News Is A Mixed Bag
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Chrysler and General Motors will close approximately 3,400 dealerships by the beginning of next year.  This represents 187,000 people that will be unemployed when all the announced closings are finished.  These numbers are huge.  Over 25% of Chrysler’s dealerships will be eliminated, while GM will eliminate over 40% of its current dealerships.  This massive restructuring of the American automobile industry follows months of both manufacturers subsisting on nearly $18 billion dollars of government bailout money since the end of the last administration.  Now, with Chrysler filing for bankruptcy and General Motors likely to file soon, both carmakers are trying to trim the proverbial fat.  Unfortunately, this comes as little solace to car dealers, some who have operated their dealerships for decades.

April’s consumer price numbers reassured economists that inflation will remain at bay for the time being.  Food and energy prices continued to fall, while fears of a continued deflationary spiral seemed to calm slightly.  Economists are hopeful that the flat retail prices are signs that recession may have reached or is quickly reaching its nadir.  They cite a stabilizing housing market and rising consumer confidence as evidence that while recovery is still not immediate, the economy is showing some signs of life.

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