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This is an excerpt from a transcript of comments made at the Society of Automotive Analysts’ 18th annual Automotive Outlook Conference in Detroit on January 10, 2006 by G. MUSTAFA MOHATAREM, Director & Chief Economist, General Motors Corporation. (Does Virgil Goode know there's a guy with a Muslim-sounding name at GM?) This out-of-touch-with-the-real-world executive type thinks the economy is booming and actually claims there is a LABOR SHORTAGE!! Now, what's interesting about this is that when you read the papers, you would never believe the U.S. economy was doing as
well as it does. You know, we've been told we had a jobless recovery. We have a record current account deficit. We have a
bloated federal deficit. We have low savings. We may have a housing bubble. We've got high energy prices, and last year
we had the hurricanes. And, yet, the U.S. economy grew over 3 1/2 percent in '05, and we're predicting just a modest
slowdown. You know, if you look at the specifics, employment growth has picked up very smartly. We added roughly 2 million jobs last year, 2 million the year before, and, while unemployment rate has hit 4.9, so we are running out of people in terms of workers, nonetheless we expect job conditions to be very strong in the coming year.
Wages and salaries have lagged somewhat. Real wages have been growing roughly in the 2 percent range. In fact, we saw
a fall-off in the fourth quarter, but when jobs are plentiful, as is very clear, and wages are growing above the rate of
inflation, plus we're tightening labor market, and that's one of the reasons why the Fed has been increasing the interest
rates, we think wage growth will also pick up.
And, finally, and importantly, if you look at vehicle prices, they have been coming down, especially inflation adjusted, and,
so, you know, income -- job growth is solid, income growth, ah, it's not great, but still very comfortable, and prices are
coming down. So affordability is very good.http://www.cybersaa.org/precis/06mohatarem.pdf |
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