“We’re in a recession. It’s as simple as that ….The question is how long or deep is it going to be?”
By Patrick Fitzgibbons, Reuters
Corporate results and outlooks darkened on Monday, and automotive companies from Japan to Italy to Detroit said October sales were the weakest in about 20 years as economies weakened and consumer credit dried up.
While government officials have gone out of their way to avoid the use of the much-dreaded “R” word (recession) in describing the current economic straits, a number of prominent officials acknowledged the severity of the crisis on Monday.
U.S. vehicle sales plunged in October, with General Motors Co down 45 percent, Ford Motor Co off 30 percent and Toyota Motor Co down 23 percent.
Mark LaNeve, GM’s North American sales chief, said the collapse in the U.S. market was linked to the “unprecedented credit crunch that is dramatically impacting the entire U.S. economy — from the housing market to big and small companies to banks to family run businesses.”
Adjusted for U.S. population changes, GM said, October’s sales figures made it the weakest month for the battered auto industry since the end of World War II.
New car sales also fell across Europe — down 40 percent in Spain and 19 percent in Italy.
The European Commission said the 15-nation euro zone was in a technical recession and economic growth would come to a virtual standstill next year, and called for coordinated action to prevent further collapse.
Also in Europe, more banks warned of more big writedowns and sharp profit falls, prompting lenders to tap government funds or seek state rescues.
And in the United States, factory activity contracted sharply in October, falling to its lowest point in 26 years, according one widely watched index.
“Pretty grim. It means we’re in a recession. It’s as simple as that …a pretty solid manufacturing recession,” said Robert Macintosh, chief economist at Eaton Vance Corp. “The question is how long or deep is it going to be?”
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