US Industry Feels Economic Squeeze

[May 22, 2008.]

During April of this year, many automotive manufacturers had to decrease their rates of production as a result of the country's economic slowdown. As a consequence, the total industrial production in America dropped by 0.7% for the month of April alone, after rising by 0.2% for the month of March. The production of cars and car parts lowered by 8.2% during the month of April. The automotive industry is now the slowest it has been since its output plummeted by 12.7% in 1998, 10 years ago.

This decrease in industrial production is higher than experts had predicted, causing many onlookers to fear for the American economy—at present, still the largest in the world. Experts and economic analysts had stated that production in the US industrial sector (including factories, mining, and electricity and water providers) would only decrease by roughly 0.3% in April.

However, the demand for cars and car products, especially new cars, has decreased more dramatically than expected. Consumers have been spending less because of the credit crisis, and the automotive industry has suffered. A major strike at General Motors, one of America's Big Three automobile manufacturers, has compounded the industry's difficulties.

According to the economic consultant Joel Naroff, the American industrial sector is very heavily dependent on automobile production. Consequently, explains Naroff, “a rapidly shrinking vehicle sector led the manufacturing sector downward, showing that there is a significant consumer slowdown.” The output of other industrial products, such as electronics, metal, and furniture, has also decreased during the month of April.

The problem is that America is still struggling with trying to get out of its recent economic recession. Although consumers are starting to spend a little more, the issues that brought about the recession still exist. The cost of food and oil is still very high. Thus, American shoppers as well as business owners are still trying to act cautiously.

Recent News:

Home Equity Conversion Mortgage Limits Raised
Earlier this month, the U.S. Department of Housing and Urban Development announced that Home Equity Conversion Mortgage (HECM) loan limits will be raised to $417,000 nationally. For most parts of the country, this is a substantial increase. Home Equity Conversion Mortgages are Federal Housing Administration-guaranteed reverse mortgages for homeowners 62 and older. They allow seniors [...]
[November 18th, 2008]
Scammers Claim Federal Reserve Program Offers Personal Loans
When people are facing tough economic times there’s always the potential for fraudsters to take advantage of them. According to the Federal Reserve, scammers are targeting people who need personal loans to try and gain access to their checking accounts. The way the fraud works is consumers are contacted and told that they can borrow personal [...]
[November 17th, 2008]
FDIC Chairwoman Proposes Plan to Reduce Mortgage Payments for Delinquent Borrowers
Another proposal has been floated for helping homeowners who are delinquent on monthly payments on their mortgages. Federal Deposit Insurance Corporation (FDIC) Chairwoman Sheila Bair proposed a plan to reduce mortgage payments for delinquent homeowners to 31% of their monthly income, according to CNN Money. To qualify, people would need to be at least two [...]
[November 14th, 2008]
Mortgage Applications On the Rise Last Week
The Mortgage Bankers Association just released their Weekly Mortgage Applications Survey for the week ending November 7, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 425.0, an increase of 11.9 percent on a seasonally adjusted basis from 379.9 one [...]
[November 13th, 2008]
GMAC to Cut Back on Auto Loans
By Brent Lane Rebuild.org Columnist GMAC has announced they will decrease their Auto Loan exposure in the European markets starting the 1st of November 2008. This cut back is due to the significant credit and capital market disruptions. The countries affected include Czech Republic, Finland, Greece, Norway, Portugal, Slovakia and Spain. On top on this cut back GM [...]
[November 12th, 2008]

Easily subscribe to the rebuild.org news feed.

Read our news without even visiting our site!

Subscribe to our news

Rebuild.org monthly news archive