August 13th, 2009
01:35 PM ET

Financial Dispatch: Consumers not feeling a recovery

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/US/08/02/ford.gain/art.ford.vehicles.gi.jpg caption="Ford Motor Co. saw an increase in domestic sales this July over last, a company official said."]

Andrew Torgan
CNN Financial News Producer

Two reports out today show one thing: happy days are not here again for American consumers.

Retail sales fell in July after two straight months of gains, a drop that surprised economists. Without car sales boosted by the government’s “Cash for Clunkers," the numbers would have been even worse.

And Wal-Mart, the world's largest retailer, reported an unexpected decline in a key sales measure.

Given Wal-Mart's dominance in the retail industry and the fact that about 200 million consumers shop at its stores every week, it’s is seen as a barometer of the health of the consumer and of the overall economy. Consumer spending, as we continuously remind you, accounts for two-thirds of all economic activity in the United States.

Jobless claims increase

The number of Americans filing new claims for unemployment benefits rose unexpectedly last week, while continuing claims fell sharply.

The Labor Dept. says new claims increased by 4,000 to a seasonally adjusted 558,000 in the week ended Aug. 8. Analysts expected new claims to drop to 545,000.

Meanwhile, the number of people remaining on the benefit rolls fell to 6.2 million from 6.34 million the previous week. Analysts had expected a slight decline.

Foreclosures spike

The foreclosure plague continued to devastate homeowners last month.

There were more than 360,000 properties with foreclosure filings - including default notices, scheduled auctions and bank repossessions - an increase of 7% from June and 32% from July 2008, according to RealtyTrac, an online marketer of foreclosed homes.

In fact, one in every 355 homes in the U.S. had at least one filing during July.

The jump occurred as several foreclosure moratoriums enacted by many states to give the Obama Administration's foreclosure-prevention efforts time to work were phased out. But for many people, the help did not come as the modification and refinancing programs have met with less success than hoped.

Ford boosting production

Ford Motor says it’s increasing production over the rest of the year to meet increased demand spurred by the government's "Cash for Clunkers" program.

Ford says it now plans to build 495,000 vehicles in the third quarter, up 10,000 from its previous forecast. That would mark an increase over year-earlier levels of 18%.

The No. 2 U.S. automaker also set a fourth-quarter production target of 570,000 vehicles, up 33% from year-earlier levels. The output gains will translate into immediately higher revenues for Ford, the only American automaker to avoid bankruptcy this year.

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Filed under: 360° Radar • Andrew Torgan • Finance
soundoff (14 Responses)
  1. Annie Kate

    Still unemployed people out there and I don't think that number is falling because people are finding jobs – I think the continuing claims are declining because people's benefits are running out. And the foreclosures continue going on and on. I don't see how anyone can say the economy is improving. And on the retail sales – maybe we will see an increase in that this month because of back to school costs. I just wonder what it will do over the holidays later this year.

    August 13, 2009 at 7:50 pm |
  2. Bull

    There are many americans that need jobs. With Ford calling back employees IS WRONG! They only are hiring all their same richer and above average workers, then the majority of americans.

    So why not give a lower pay range to these richer workers, or better yet, give these jobs to someone else can use the money. When these guys are making $50 a hour and they were laid off, they should have saved enough money to survive, so these richer americans are the first ones to financially profit from coming back.

    Why not hire new employees, who never in their life was able to work and make that much money per hour in the life?

    It's just another case of the rich, helping the richer first, and cut out the lower level workers... These workers making 100,000+ a year are the first ones to go back to work, and pay for their big houses, while the lower income people wanting to work, is still stuck in the lower priced jobs, if they can find any anywhere.

    I'm not happy that the big companies find it better to re hire workers and pay athem 50 bucks an hour, while other americans can never get jobs like this. Why not have Ford pick new employees from the bread lines or people actively looking for jobs?

    August 13, 2009 at 7:43 pm |
  3. Mary S.

    Things are NOT better! More people than ever on government assistance and fewer caseworkers to handle the increased volume.

    August 13, 2009 at 7:35 pm |
  4. Julie

    Stocks are up, my neighborhood has seen the last of the foreclosures, hiring for low-level workers is on the rise. There are some positive signs.

    If you're an architect, computer programmer, engineer, technical writer, construction worker, real estate agent, or travel agent, you're still screwed. Construction and travel will eventually come back. If you are in the technical professions, you're out of luck. Because of overseas outsourcing, many of these jobs will not come back until management finally gets it that hiring Boppu in India isn't saving him any money when he's pissing off his customers and having his intellectual property and trade secrets stolen by foreign outsource firms.

    August 13, 2009 at 6:26 pm |
  5. Chase_Customer

    Chase is cutting a lot of credit limits and my payments have improved and credit limits have improved. some banks are giving good benefits based on payments but Chase is punishing people for paying more and reducing lmiits, closing accounts.
    WAMU did the same thing and it went into bankruptcy after some time so not sure why chase is doing such a thing.
    It is also charging high APR on some accounts and because it is closed they are not adjusting the APR.

    August 13, 2009 at 6:01 pm |
  6. Dave Rubenstein

    When is this country going to wake up and start taxing the hell out of imports from countries that refuse to stop polluting or pay their work force substandard wages.

    Guess what, jobs would come back to America, and several other benefits like health care and national debt will go away.

    August 13, 2009 at 5:38 pm |
  7. earle,florida

    How very unrealistic it is for a homeowner today to get a mortgage modification,and refinancing opportunity when every mortgage wriiten in the country since 2005 is upside down. The parameters,and metrics for the program are ludicrous,to say the least, causing only frustration,and anguish. This is another example of our governments well-thought-out programs,which by the way we could be juxtaposed over the "Healthcare Reform Act", now grudgingly crawling through congress,headed for the "Trash Bin"! Finally to add to the homeowners misery ,there was a timely law passed,and enacted by congress in October/2005 (through the blessings of the K-Street Boys) dubbed the"Bankruptcy Abuse Prevention and Consumer Protection Act"! A brilliantly wriiten,"piece of garbage" legislative reform package (created from the far-right abyss) to make it (intentionally) harder for "Joe&Mary Consumer",to get court orders wiping out their "Uncollateralized Debt"! Say it ain't so,...?PS. Bankruptcy Fillings to hit 1.4million 2009,...

    August 13, 2009 at 3:57 pm |
  8. JC- Los Angeles

    With Alt-A and Option ARM loans about to re-adjust and with unemployment staggering, foreclosures will increase and the recession will head up market and punish the middle and upper middle class.

    While half of the country might be able to hold their collective breaths while under water, job loss will inevitably sink most.

    How anyone thought that a post 9/11 Greenspanian inspired spending frenzy was good for America is anyone's guess.

    Until we manufacture and produce goods and services that people around the globe need, we will exist solely on fraudulent financial instruments.

    August 13, 2009 at 3:24 pm |
  9. joe

    The problem is that everyone is quite aware that the US is accumulating debt and an unprecedented rate and most know taxes will have to increase – the Government can not borrow like this and not try to pay it back without our hard earned dollars, so why would anyone really spend their cash. Its ironic that Mr. Obama faulted the banks/mortgage companies for making it too easy for US consumers to accumulate debt and he turns around and does it at the government level. Countries such as France and Germany announced that they have already exited the recession and they did it without trillions of dollars of wasted stimulus, TARP, TALF, PIIP, etc. It does not take a rocket scientist to realize we all better hold onto our money because Mr. Obama is going to come knocking for a handout to pay back this waste through higher taxes.

    August 13, 2009 at 2:40 pm |
  10. SLM

    Melissa – what city/state is your hotel?

    Construction in California is near dead! Things are NOT getting better, they are getting worse. More small businesses are closing every day. Many people I know that are still working in various industries had their hours/pay cut, so they are not on the unemployment figures, but yet they are not where they were a year ago.

    August 13, 2009 at 2:34 pm |
  11. Enough

    Nope, not feeling it, since it isn't happening here. They claim the recession is over when job losses slow down, but that still does nothing to put those people back to work. Until unemployment goes down substantailly and those people have jobs it isn't over! The Fed leaving the interest rate at nothing is a strong indication nothings gotten any better.

    August 13, 2009 at 2:06 pm |
  12. Melissa

    Ok, thats wrong.

    I work in the hotel industry, and we're running at the same capacity as we have every year. If people didn't have money, they wouldn't be wasting it on vacations.

    August 13, 2009 at 1:56 pm |
  13. Fed Up

    No, things are not getting better, regardless of Obamas declaration that his stimulus is working!! Where are all the jobs he promised to create? You don't hear him spout off about that these days.

    August 13, 2009 at 1:50 pm |
  14. not possible

    What about the difference between sitting on an eighth and passing around a garbage bag of money; oh, the economy? Our American Consumer, despite an ability to pay, goes on welfare and starts to blame our economy for its own deficit. This is so unfair to employment; where do you suppose you are getting your meat and or eggs? Agents everywhere must object to military microhelicopters when their marines sleep through bugal calls to pester their supervisor about robot perimeters and land mines...

    August 13, 2009 at 1:47 pm |