[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/05/31/art.gm.gi.jpg caption="Improved results may allow GM to start repaying government loans sooner. "]
CNN Financial News Producer
General Motors says that improved results will allow it to start repaying government loans sooner than expected, although the company continued to lose money in its first quarter since emerging from bankruptcy.
GM says it anticipates paying $1 billion to the Treasury Dept. in December, along with $192 million to the Canadian and Ontario governments.
GM received $6.7 billion in loans from the Treasury as part of its bankruptcy proceedings, along with help from Canada and Ontario. But that’s only a fraction of the $50 billion in bailout money GM has received from U.S. taxpayers since the end of 2008.
The government now owns a majority stake in GM, and it’s not clear if taxpayers will ever recover all that much of the $50 billion investment.
Despite a recent upturn in auto sales, GM continues to struggle. The company lost $1.2 billion between its emergence from bankruptcy on July 10 and the end of the third quarter on Sept. 30.
Also front and center on Wall Street, retail sales rose a better-than-expected 1.4% last month, compared with September's revised decline of 2.3%. But excluding autos and auto parts, sales edged up 0.2% - which is slightly worse than expected.
With Black Friday - the big shopping day after Thanksgiving - less than two weeks away, these numbers are being closely scrutinized for signs of how much consumers will be willing to spend during the all-important holiday shopping season.
Consumer spending accounts for two-thirds of all economic activity in the United States.
Ben Bernanke is also making news today. The Fed chairman says the recovery in the U.S. economy will be modest, with higher than desired levels of unemployment in the foreseeable future.
Speaking to the Economic Club of New York, Bernanke said in his prepared remarks that financial conditions are significantly better than when he spoke to the club a year ago– at the height of the global financial crisis.
But he cautioned that “some important headwinds - in particular, constrained bank lending and a weak job market - likely will prevent the expansion from being as robust as we would hope.”
And he didn't offer much immediate hope of a better labor market in the U.S. either.
“Jobs are likely to remain scarce for some time, keeping households cautious about spending,” Bernanke cautioned.
The latest Labor Dept. report showed unemployment hit 10.2% in October, the first time it has been in the double digits in 26 years. Employers also trimmed 190,000 jobs from payrolls, the 22nd straight month of job losses.
Despite the Fed chief’s comments, stocks are off to the races, with the major indexes hitting fresh highs for the year as investors focused on the weak U.S. dollar and those signs of improvement in the retail sector.
Stocks have rallied over the past two weeks as investors have gained confidence in the pace of the economic recovery. The market has also been supported by signs that policymakers around the world will keep economic stimulus efforts in place for a prolonged period of time.
The weak dollar helped also helped propel gold prices to a new all-time high above $1,130 an ounce.
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