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October 1st, 2009
03:28 PM ET

Financial Dispatch: ‘Clunkers’ hangover hits car dealers

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Andrew Torgan
CNN Financial News Producer

Ford Motor says auto sales fell 5.1% in September from the same month last year, breaking a two-month streak of gains and illustrating the hangover many dealers are suffering through in the wake of this summer's popular “Cash for Clunkers” program.

Rival General Motors reported a 45% drop in sales. Chrysler Group, meantime, said September sales fell 42% from a year earlier.

On a month-to-month comparison, sales at both Ford and GM fell 37% from August. Two of Ford's vehicles - the Focus and Escape - were among the top sellers in the “Clunkers” program.

Chrysler’s sales fell 33% from August, but since the company has a heavier reliance on trucks than its rivals, it did not get much of a sales lift from the rebate program.

Ford was the only member of Detroit’s so-called “Big Three” automakers that did not declare bankruptcy this year or receive any government bailout money.

Saturn crashes to earth

General Motors is shuttering its Saturn brand after car dealership operator Penske Automotive Group announced Wednesday it cancelled plans to acquire the unit.

As a result, GM said it will wind down the brand and dealer network, potentially putting 13,000 Saturn dealership jobs at risk.

The announcement comes nearly four months after Penske agreed to buy the rights to the 19-year old brand from GM when the automaker was in bankruptcy.

Personal income and spending numbers jump

Personal income and spending, important measurements of the economy, both jumped in August – an indication of at least some economic improvement.

Personal income edged up $19.3 billion, or 0.2%, according to the Commerce Department. And personal spending jumped 1.3%.

The government also revised both figures higher for July. The Commerce Dept. is attributing the “Cash for Clunkers” program for most of the increase in spending in August.

Pending homes sales rise

Meanwhile, homebuyers signed more sales contracts in August than in any month this year, boosted by the looming expiration of an $8,000 first-time homebuyers' tax credit.

Pending homes sales surged 6.4%, and have now risen for seven straight months to the highest level in more than two years.

Pending home sales rose 3.2% in July.

Weekly jobless claims rise

Despite persistent signs that we are in the midst of a recovery, people continue to lose their jobs.

The number of first-time filers for unemployment insurance jumped last week. There were 551,000 initial jobless claims filed in the week ended Sept. 26, an increase of 17,000 from an upwardly revised 534,000 the previous week, according to the Labor Dept. That topped economists' forecasts.

In addition, the number of people who continue to receive benefits for one week or more dropped by 70,000 to 6,090,000 in the week ended Sept. 19, the most recent data available.

Detroit: Too broke to bury their dead

Detroit is plagued by unemployment, corruption, and abandonment. But for some families, the tough economic reality extends even beyond the grave.

At the Wayne County Morgue, a record number of unclaimed corpses are filling the freezers. The morgue's chief investigator blames the economy. He says people just can't afford to claim their loved ones.

Checkout CNNMoney.com's latest report on: Assignment Detroit.

47% will pay no federal income tax

Most people think they pay too much to Uncle Sam, but for some people it simply is not true.

In 2009, roughly 47% of households, or 71 million, will not owe any federal income tax, according to estimates by the nonpartisan Tax Policy Center.

Some in that group will even get additional money from the government because they qualify for refundable tax breaks.

The ranks of those whose major federal tax burdens net out at zero (or less) is on the rise. The center's original 2009 estimate was 38%. That was before enactment in February of the $787 billion economic recovery package, which included a host of new or expanded tax breaks.

Follow the money… on Twitter: @AndrewTorganCNN

soundoff (2 Responses)
  1. JC- Los Angeles

    It should surprise no one that Ed Whitacre, who formerly ran a monopoly with no competition, is struggling to run a company with endless competition.

    The only thing worse than hiring him, is seeing him in his own commercials where barely a GM car is visable.

    You can't make this stuff up.

    October 1, 2009 at 4:49 pm |
  2. matthew queens, ny

    the cash for clunkers along with other spending we are doing are just short term fixes for long term problems. until we get our financial house in order we will continue to see our economy struggle to recover. meanwhile our debt continues to grow handing off our problems and mistakes to future generations..

    October 1, 2009 at 4:14 pm |