Another reason to hate a recession: An assistant vice president with the St. Louis Federal Reserve found that traffic tickets go up significantly when local government revenue falls, the St. Louis Post-Dispatch reports. Thomas A. Garrett and economist Gary A. Wagner are set to publish a study in next month’s Journal of Law and Economics that shows a 1% drop in local government revenues leads to a .32% increase in the number of traffic tickets. “Local governments behave, in part, as though traffic tickets are a revenue tool to help offset periods of fiscal distress,” the report says. For more information, click here.
Not a good outlook: A survey of global automotive executives found that most expect U.S. automakers to see a significant drop in their share of the market, but that restructuring efforts will make the American manufacturers more efficient and competitive. The report, released by KPMG and based on interviews with more than 200 senior executives worldwide, found that Toyota, Honda, Hyundai and Volkswagen are expected to gain market share in the next five years, while expectations are lower for General Motors, Ford and Chrysler. Half of the executives expect restructuring plans will succeed for American automakers, and 57% say the process will be finished by 2011.
Unemployment remains high: The Labor Department reported today that initial applications for unemployment insurance dropped by 24,000 to a seasonally adjusted 467,000 for the week ending Jan. 3. Wall Street economists expected initial claims to increase, but analysts said the new figure reflects the difficulty the government has in making seasonal adjustments over the holiday period. The four-week average of initial claims, which smoothes out fluctuations but also includes the shortened holiday weeks, fell by 27,000 to 525,750. The number of people continuing to claim jobless benefits jumped unexpectedly by 101,000 to 4.61 million. That was above analysts’ expectations of 4.5 million and the highest level since November 1982, when the nation was emerging from a steep recession, though the labor force has grown by about half since then. Unemployment figures due out Friday are expected to show that the U.S. lost a net total of 500,000 jobs in December. If accurate, that would bring total job losses last year to 2.4 million, the first annual job loss since 2001 and the highest since 1945, though the number of jobs has more than tripled since then.