Consumer Confidential: GM recalls vehicles, economy strengthens, good times predicted
--It's been a good year for GM, with the company emerging from bankruptcy and selling its stock once again to the public. But the year is ending on a low note. GM says it's recalling almost 100,000 vehicles to fix two problems that could cause the rear axle to lock and the passenger-side airbag not to work. The airbag recall affects almost 96,000 2005 to 2007 model year versions of the Cadillac CTS. The axle recall affects almost 1,300 2011 model year versions of the Cadillac Escalade, Chevrolet Avalanche 1500 and Silverado 1500, as well as the GMC Sierra 1500. The axle recall is expected to begin in January. GM did not say when the airbag recall would begin.
--On the other hand, the economy has a good head of steam as it nears the finish line for 2010. The latest stats suggest employers are laying off fewer workers, businesses are ordering more computers and appliances, and consumers are spending more confidently. The number of people seeking unemployment benefits edged down by 3,000 to a seasonally adjusted 420,000, according to the Labor Department. That was the second drop in three weeks. Meanwhile, companies increased their orders for long-lasting manufactured products by the sharpest amount in eight months, personal spending rose modestly last month and consumers' incomes grew 0.3%, lifted by gains in stock portfolios. God bless us every one.
--And because I want to close this blog for the year on a happy note, here's the latest word from Jim O'Neill, the Goldman Sachs financial guru who accurately predicted the rise of emerging-market economies a decade ago. He's now telling clients that 2011 will be the "year of the USA" and that the stock market could rise by as much as 20% as the economy recovers. I have no idea whether he's right. But it's nice to think we'll have more than coal waiting for us as we open our Christmas stockings.
--After I put my Friday newspaper column to bed, I'll be AWOL for the remainder of the year, enjoying a little time off with friends and family. All the best to you and yours this holiday season. See you in January.
-- David Lazarus
Photo: A recall ends an otherwise impressive year for GM. Credit: Paul Sancya / Associated Press