December 12, 2008

The Producer Price Index for Finished Goods fell 2.2 percent in November, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported. This decline followed decreases of 2.8 percent in October and 0.4 percent in September. At the earlier stages of processing, prices received by manufacturers of intermediate goods dropped 4.3 percent in November after falling 3.9 percent in the prior month, and the crude goods index declined 12.5 percent subsequent to an 18.6-percent decrease in October.
 
Among prices for finished goods, the index for energy goods fell 11.2 percent in November following a 12.8-percent drop in the preceding month. Prices for consumer foods were unchanged after declining 0.2 percent in October. By contrast, partially counteracting …

Statistics Canada reported that Canadian industries reduced their use of production capacity for a fifth straight quarter in the third quarter, with a majority of sectors, especially the automobile and construction sectors, contributing to the downturn.
 
Industries operated at 77.4% of their capacity, down from 77.7% in the second quarter. This was the rate’s lowest level since data were first kept in 1987. The rate in the third quarter of 2008 was 9.7 percentage points below its peak of 87.1% reached in the fourth quarter of 2000.
 
In the transportation equipment manufacturing industry, almost two-thirds of which consists of automobile and parts manufacturers, capacity …

Late Thursday, news broke that the U.S. Senate could not come to an agreement on a bailout loan package for the U.S. automakers. Now, hope for the Big Three lies almost entirely with the White House, where the president is considering using money from the Troubled Asset Relief Program to keep Chrysler and GM from filing bankruptcy in a matter of weeks. Collapse of the auto industry could cost 2.5 million jobs in related industries, according to Mark Zandi, chief economist of Moody’s Economy.com.
 
Automotive News reported that about $15 billion remains from the initial funding of TARP, exactly the amount the automakers say they need to stave of bankruptcy through the first quarter of 2009. (Read the full article from …