Warren Buffet’s Berkshire Hathaway had its worst decline ever last year, the Dow Jones Industrial Average had its worst February (and March is coming in like a bear), there’s a record number of Americans signed up for unemployment, and AIG reported the worst corporate loss in history. Construction spending is down, manufacturing is down, and U.S. gross domestic product eroded by 6.2 percent in fourth quarter (revised downward from 3.8 percent). In what most economists call a statistical fluke, personal spending and income edged up in January; in what economists believe is a trend, personal savings jumped.
Americans are buying things, just not as much stuff. U.S. auto sales are spiraling down further, for example, even though they’ve hit 34-year lows, according to CIBC World Markets. CIBC’s corporate and investment banking unit expects U.S. auto sales to decline another 30-40 percent to 8-9 million vehicles annually during the next five years. “Just as two million housing starts proved to be a bubble, so was the average 16 million unit auto sales of the last five years,” states Jeff Rubin, chief economist at CIBC World Markets.