April 13th, 2010
11:30 AM ET

Financial Dispatch: Toyota takes another hit

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2010/images/04/13/t1.2010lexusgx460.jpg width=300 height=169]Andrew Torgan
CNN Financial News Producer

Still stinging from the recall of more than 8 million vehicles worldwide due to safety issues, Toyota is now dealing with yet another blow to its once-stellar reputation.

Consumer Reports has issued a safety warning on Toyota's 2010 Lexus GX 460 SUV because of an increased rollover risk during a turn.

The magazine says it uncovered the problem during routine tests, and is urging car shoppers not to buy the GX 460 until this problem has been remedied.

The special designation given to the GX 460 by Consumer Reports - "Don't Buy: Safety Risk" - is rarely given by the magazine. The last time it was used was in 2001, on the Mitsubishi Montero Limited.

Game over?

Baseball legend and master of malapropisms Yogi Berra famously said, “It ain’t over ‘til it’s over.”

Who knew Yogi was an economist?

The panel of economists responsible for identifying changes in the U.S. business cycle said Monday that it is “premature” to say whether the recession that began in 2007 has ended.

The National Bureau of Economic Research said the panel met last week in the hopes of determining when the economy, which slipped into recession in December 2007, hit bottom

“Although most indicators have turned up, the committee decided that the determination of the trough date on the basis of current data would be premature,” the group said.

It is important to remember, however, that virtually all mainstream economists agree that the recession ended at some point last year. Gross Domestic Product grew at a solid pace in the third and fourth-quarters of last year, and when the first-quarter report comes out later this month, it too will likely show growth.

So while yes, there is still weakness in job growth and housing, there is no doubt in the minds of most economists that the recession is over.

The NBER’s assessment on dating the economic cycle is a retro-active. For example, it took a full year after the latest recession began for the group to declare it so. And the last recession - in 2001 - was not officially declared over until 18 months after it ended.

Jobless one step closer to regaining benefits

The Senate took the first step Monday to extend the deadline for the jobless to file for unemployment insurance.

Monday's action, a procedural step narrowly approved by a 60 to 34 vote, clears the way for a final vote, which will likely come later this week. The $9.2 billion bill would be retroactive to the April 5 deadline and would extend benefits through May 5.

More than 200,000 jobless Americans were expected to stop getting checks last week after lawmakers failed to extend the deadline to file for federally paid benefits. A total of a million people could lose benefits this month if the Senate doesn't act, according to the National Employment Law Project.

Big profits, big expectations

A strong first-quarter reporting period is underway, igniting what could be a big year for corporate profit growth.

While Alcoa’s report late Monday was mixed, overall results are expected to be strong.

Cost-cutting, productivity gains and the easy comparisons to a year ago will all help lift first-quarter results, said Sam Stovall, chief investment strategist at Standard & Poor's.

Looking further ahead, second-, third- and fourth-quarter earnings are also primed for growth.

Follow the money… on Twitter: @AndrewTorganCNN

Filed under: Andrew Torgan • Economy • Toyota
soundoff (One Response)
  1. Phil Cooper

    The Lexus GX 460 pronouncement from Consumer Reports is stupid. Having watched the video, I would EXPECT a vehicle to roll over if it were driven that way. I've driven high-clearance four-wheel drive vehicles for hundreds of thousands of miles without even getting close to fishtailing or rolling over, and none of them were equipped with anti-lock brakes or stability control systems. If someone is unable to drive so that they stay out of trouble under ordinary conditions, perhaps they should hang up their car keys and take a bus or streetcar.

    Considering that Consumer Reports issued a poor rating for the Chevrolet Corvette some years ago for "body rust" (how does a plastic auto body rust?), take any pronouncements issued by that organization for what it's worth – which ain't much.

    April 13, 2010 at 1:22 pm |

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