Morning Business Memo…
After the recent devastation, superstorm Sandy may be about to give a shot in the arm to the economy. Look for a surge in November auto sales when the numbers are released this week. A lot of buyers in the Northeast and Midwest who postponed buying a new car because of Sandy went back to showrooms last month. Then there is the effect of destroyed and damaged cars, and those purchases could lead to the best month for auto sales in nearly five years. The National Crime Insurance Bureau estimates that well over 200,000 cars were damaged by Sandy, and many of them are being replaced. Analysts estimate last month’s vehicle sales could be above an annual rate of 15 million. That would be well over 10 percent up on November of last year.
Sandy caused enormous destruction and suffering, especially in the coastal regions of New York and New Jersey. “This is a very perverse thing that happens,” economist Diane Swonk tells ABC News Radio. “We have an extraordinary storm like this that hits such a populated area. It does make a dent in economic activity but then subsequently there is a stimulative effect.” This will not only boost auto sales. “People are making lots of repairs, replacing carpeting, appliances, furniture that was ruined in the storm. This is going to enhance what looks like a housing related recovery.”
In other business news today… Delta Air Lines is considering taking a 49 percent stake in Virgin Atlantic Airways. The share of the carrier is owned by Singapore Airlines… If there is no progress on fiscal cliff talks this week it could lead to another slide on the stock market… A busy week for economic reports: The Institute for Supply Management today releases the monthly manufacturing index. The Commerce Department has construction spending for October. On Friday, the Labor Department will release its monthly employment report.
America’s biggest cargo port is mostly shut down just as last-minute imports come in before Christmas. Contract talks involving clerical workers and shippers have resumed. A strike at the port of Los Angeles and Long Beach is into its sixth day. The clerical workers began striking last Tuesday in a long contract battle over claims that management had been outsourcing their well-paid jobs out of state and overseas. The Los Angeles/Long Beach Harbor Employers Association, which represents 14 shippers and terminal operators, denies the allegation. They say they have offered lifelong job security to the 600 or so full-time clerical workers.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc