July 18, 2019

New-Car Sales Fall 10.2% in Europe, Continuing Slump

PARIS — European new car sales contracted in March for an 18th consecutive month, led by declines in Germany and France, industry data showed on Wednesday.

New vehicle registrations in the European Union fell 10.2 percent from a year ago, the European Automobile Manufacturers’ Association reported from Brussels, slipping to 1.3 million vehicles from about 1.5 million.

Over the first three months of the year, sales in the 27-nation bloc totaled slightly fewer than three million units, 9.8 percent below the level of a year ago, making the worst start to a year since the association began collecting the data in 1990, when only 15 nations’ sales were considered.

Quynh-Nhu Huynh, statistical director for the association, said that it had predicted a 5 percent decline in 2013 sales from the 12 million units sold in 2012, but that the forecast might have to be revisited soon because of the poor start.

Economic stagnation continues to depress demand in the European Union long after auto sales in the United States have rebounded and while emerging markets have continued to register growth. Across Europe, more than 26 million men and women are unemployed, according to official data, and the overall economy is expected to contract in 2013 for a second straight year.

The car industry directly accounts for more than two million jobs in Europe, including some of the best-paid manufacturing jobs, and another 10 million “indirect” jobs, according to the association. But many of the Continent’s ailing carmakers are trying to reorganize, cut their work forces and, in some cases, close plants, medicine that may make the economy sicker in the short term.

Peter Fuss, who follows the market at the Ernst Young Global Automotive Center, predicted that 2013 European car sales would decline by as much as 7 percent from 2012. But carmakers will have to continue discounting prices even to hold the decline to that level, Mr. Fuss said, putting further pressure on profits.

The course of the German and British economies will help to determine the industry’s fortunes, he said. “We expect the French, Italian and Spanish markets to continue their decline over the rest of the year in the absence of any major government intervention to encourage vehicle buying or replacement,” he said.

The data released on Wednesday showed that sales in Germany, the largest economy in the European Union, fell 17.1 percent. Economic sentiment among Germans declined sharply in the last month, according to a report on Tuesday from the ZEW research institute.

In France, hobbled by a weak economy and 10.8 percent unemployment, sales fell 16.2 percent.

The only expansion among major markets was a 4.9 percent increase in Britain, which is outside the euro zone.

Sales for Volkswagen, Europe’s biggest automaker, slid 9 percent, with the biggest decline at its namesake brand. Sales at PSA Peugeot Citroën, No. 2 in Europe, plunged 16 percent. Ford Motor’s sales slid 15.8 percent, while General Motors’ tumbled 12.6 percent.

The data confirmed that the high-end market, which had held up even as the mass market withered, has also begun to lose steam.

Sales at Daimler, which warned last week that its 2013 profit forecast was beginning to look shaky, fell 1.2 percent, while its rival, BMW, posted a 4.7 percent drop in sales.

Article source: http://www.nytimes.com/2013/04/18/business/global/european-auto-market-slump-continues.html?partner=rss&emc=rss

Bucks Blog: Worried About Taxes, Some Consumers Cut Back

As time ticks away for a resolution to the so-called fiscal cliff mess, some consumers aren’t taking any chances.

About one in three Americans has cut back on personal spending over the last month or so because of worries about the impact on the economy — and their pocketbooks — if an agreement isn’t reached, a survey from Bankrate.com finds.

But despite all the drama, drastic belt-tightening seems premature to me. Some economists argue that the impact of the “fiscal cliff” — shorthand for a combination of automatic tax increases and spending cuts that will take effect unless the government acts — will probably be felt gradually, rather than all at once. And the impact of cuts on the military and other programs can be mitigated, if Congress gets its act together relatively early in 2013. Meanwhile, the economy appears to be gaining steam. The unemployment rate has fallen to 7.7 percent, and the housing market continues to recover.

It’s true, though, that some effects, including a two percentage point increase in the payroll tax and the end of unemployment benefits for more than two million people — would be felt right away. And those two hits may weigh most heavily on consumers who are most likely to say they’re cutting back. Consumers most inclined to have cut their spending over the last 30 days, the survey found, include those with annual income under $30,000 and those with no more than a high school diploma.

“The risks of going over the fiscal cliff are beginning to resonate with consumers much the way they have with businesses that have held back in recent months,” Greg McBride, Bankrate’s senior financial analyst, said in a statement.

The telephone survey of 1,001 adults was conducted by Princeton Survey Research Associates International from Dec. 6 to 9. The margin of sampling error is plus or minus four percentage points.

Are you cutting back on spending because of worries about the tax situation? What steps have you taken?

Article source: http://bucks.blogs.nytimes.com/2012/12/26/worried-about-taxes-some-consumers-cut-back/?partner=rss&emc=rss

Your Money: Laid Off, With Retirement Almost in Sight

Older unemployed people face the double whammy of declining home values and an investment portfolio that has been treading water, at best. But they have also lost the one stabilizing factor that was supposed to see them through: a paycheck.

That has forced many of these people — and there are nearly two million of them over age 55 — to make tough decisions about how to make up for the lost income, especially since it is taking them substantially longer than their younger peers to find work. In December, the average time someone 55 or older was unemployed was 52.2 weeks, according to the Labor Department; more than 210,000 others have simply quit looking.

Being unemployed for a year is enough to burn through even the richest of emergency savings funds. So if you have lost your job, the first step, as one financial planner put it, is to do financial triage. You need to look at your cash flow, figure out how much you have been spending and decide the minimum you absolutely need to get by.

“You cut as much as you can, and if you still come up short $500 a month, then you have to figure out the best place to get that money,” said Dan Danford, a financial planner in St. Joseph, Mo.

It may mean that you need to consider taking your pension a bit early, or finding a part-time job. But there are several other little-known tricks that will help you create a bridge of sorts until you either find work or manage to eke your way to retirement.

REASSESS CAREER POSSIBILITIES Though easier in theory than practice, you may consider a second career in an area that you enjoy, perhaps on a part-time basis, through much of your retirement. “It is not very often that we are forced to evaluate our career and to determine if we really want our old job back,” said Alan Moore, a financial planner in Racine, Wis.

He suggests thinking about it this way: Even if you earn only $500 a month working part time in retirement, it’s equivalent to having another $150,000 in the bank, assuming that you pull out 4 percent of that money annually, an industry standard. “Plus, it is much easier to earn $500 a month than save an additional $150,000,” he said, adding that he advises his clients to work with a career coach.

Joshua Gottfried, a financial planner in Glastonbury, Conn., worked with a client who had lost his job as a plant manager. Without his income, Mr. Gottfried calculated, his savings would need to earn an unrealistic 8 or 9 percent return to meet his retirement goals. So he and his wife decided to take 15 percent of their savings to start a construction company. “If he can make 15 to 20 percent on the money he put in the business, and he can make 5 or 6 percent on his passive investments, then it will net out,” Mr. Gottfried said.

SOCIAL SECURITY For many healthy people, it is almost always worth waiting until your “full retirement age,” at the very least, to begin collecting Social Security. But for those with few or no resources, collecting sooner may be the only option. There are a couple of workarounds, however, that may allow you to collect benefits on a spouse’s record, while your own benefits continue to accrue.

That is what Barbara Saltsman, 64, learned after she lost her job as a legal secretary in June. She had planned to work until she was 66, and while she has continued to scour the Web for new jobs, she hasn’t been able to find anything that pays close to her old salary.

“I have 40-something years of experience, and companies don’t want to pay for it,” said Ms. Saltsman, who lives in Chittenango, in upstate New York.

Unemployment benefits were not enough to keep her finances afloat. So she thought she would have to take Social Security two years before her full retirement age, which would have substantially reduced her benefits. But when she visited her local Social Security office, the representative suggested collecting benefits on her deceased husband’s record until she turned 70, when she could switch to her own benefits and collect more.

Some individuals may also benefit from the “file and suspend” strategy, which allows one spouse to file for benefits and then immediately suspend them. Then, the unemployed spouse can collect spousal benefits on the working spouse’s record while his or her own benefits continue to accrue. But this works only if both spouses have reached full retirement age.

TAPPING RETIREMENT SAVINGS You typically cannot pull money out of a company plan like a 401(k), or a traditional I.R.A., until six months after your 59th birthday. Otherwise, you will face a 10 percent penalty on the amount withdrawn.

You obviously want to avoid withdrawing money prematurely. Several financial planners suggest pulling from emergency savings if you have it or other taxable accounts before resorting to retirement accounts. But if you absolutely must tap these funds, some of these methods will help reduce the damage.

Article source: http://feeds.nytimes.com/click.phdo?i=0fa34c244ef0548d97b26ffc379a3b2d

Economix Blog: Casey B. Mulligan: The Logic of Cutting Payroll Taxes

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Casey B. Mulligan is an economics professor at the University of Chicago.

Payroll taxes are by no means the only thing that stops people from working, but one of President Obama’s payroll tax cut proposals could nonetheless create a million or more jobs.

Today’s Economist

Perspectives from expert contributors.

Last week I estimated that the president’s proposal to cut the employer portion of the payroll tax by 3.1 percentage points could raise employment by more than a million, and maybe as much as three million.

You might (as some readers wrote to me) think that a payroll tax cut is not, by itself, a good reason for employers to hire, and on that basis conclude that my estimate is way off.

I agree that jobs are not created by payroll tax cuts alone, and my estimate reflects that fact. About 131 million adults are working now, and 109 million adults are not working. If I’m right that the payroll tax cut would raise employment by one million to three million, that means that 106 million to 108 million adults would still not be working despite the payroll tax cut.

The chart below illustrates the results for the case that the payroll tax cut raises employment by exactly two million.

In other words, my estimate is that at least 97 percent of people not working would still not be working regardless of the payroll tax cut. That’s because, as you might deduce, payroll taxes are only one factor among many that determine how many people are employed. Nevertheless, raising employment by one million to three million would be an accomplishment for the president, and one that would be visible in the national statistics.

By the same logic, if someone were to propose raising the payroll tax by 3.1 percentage points, I would expect employment to be reduced by one million to three million. Again, the payroll tax is only one of many factors affecting hiring decisions, which is why my estimate of a payroll tax increase implies that more than 97 percent of workers would continue to work despite the increase.

Indeed, we all know people who would continue to work even if the payroll tax were raised by 30 percentage points, let alone three. We also know people who would not work even if taxes were eliminated completely.

But the fact that more than 100 million people are not employed, and more than 100 million people are employed, suggests that there could well be a million people (or two million, or three million) who are near the fence. For that small fraction of the population, there are almost as many things pushing toward making them employed as making them unemployed; a payroll tax cut could tip the balance.

For hundreds of millions of others, the balance is tilted too far for a payroll tax cut to make a difference. But while economists can debate the exact numbers, few of us can conclude that a small tax cut has no effect. Rather, a small tax cut should be expected to have a small effect — and at this point one worth seeking.

Article source: http://feeds.nytimes.com/click.phdo?i=a1bb3ef8f31b3799b20d54afce88a488