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The economy may be improving, but what seems like a jobless recovery many continued to dampen used-car sales.
The national unemployment rate stayed at 10 percent as employers shed another 85,000 jobs in December.
That number was low compared to a year ago, when 671,000 jobs were lost.
But many observers expected a gain after the November numbers were revised upward.
The December numbers may still be revised upward and initial jobless claims are trending downward.
California, with its potent mix of budget shortfalls and a collapsed housing market, suffers among the worst unemployment.
Of the 17 areas with jobless rates of at least 15 percent in November, 11 were located in California. El Centro, Calif., and neighboring Yuma, Ariz., continued to record the highest unemployment rates, 29.2 and 21.1 percent, respectively.
The Detroit Metro area reported the highest unemployment rate in November, 15.4 percent, among the 49 metropolitan areas with a Census 2000 population of 1 million or more.
Many of those losses come from cuts at the auto makers and that creates opportunity along with challenges.
Detroit has been one of the worst used-car markets because a majority of residents are eligible for some form of discounted pricing on new cars. Those discounts disappear with the employment.
Vince Law, owner in Law Auto Sales in Wayne, Mich., said he’s gained several sales from new-car dealers as a result. It’s not enough to offset the high unemployment rate.
“It’s probably having a 20 percent to 30 percent drag on sales,” Law said. “There’s nothing you can do about the unemployment rate.”
He said the downturn will prove good for business when it’s over by eliminating weak dealers.
South Dakota has fared much better than Michigan or California. Ron Kopren, owner of Kopren Motors in Rapid City, S.D., said 2009 was a great year for his store.
The area suffered some job losses when a major employer shut down last year, but unemployment is still half of what it is in the rest of the nation.
Kopren’s biggest challenges in the past month have been freezing temperatures and about two feet of snow.
“This time of year, weather plays a bigger part,” he said. |
