Prepping for a rebound

Federal Reserve chief Ben Bernanke made late headlines Tuesday by declaring the recession "very likely" over.

Bernanke was quick to add that recovery will be slow and that the U.S. economy – particularly the jobs market – will remain tepid for some time to come. It’s something of a chicken-or-egg scenario and many events, from weather catastrophes to geopolitical crises, can send the entire process back to ground zero.

No matter. It’s clear from reports on a number of economic fronts – stock trading, housing, retail sales – that hope is afoot. Even though naysayers can find a way to debunk every bright spot (“Retail sales are up only because of cash-for-clunkers”) your readers will be looking to you to decipher the signs.

Keep in mind that a recession generally turns around in roughly this order: markets rise, credit loosens up, then pent-up commercial investment and consumer spending gain speed. With more cash flowing, the housing market stabilizes or even grows, and when companies in all sectors think the resumed spending is here to stay they begin to hire again.

So, start looking for economic rebound stories in that order. For starters, get to know commercial bankers and institutional investors within your territory, and take their pulses on a regular basis.

And if you’re in the Dallas area on Monday, join us for a Reynolds Center free workshop, Finding Fresh Angles on the Economy, including a segment on covering signs of an economic recovery in your own backyard. If you can’t make the seminar, check back here soon for highlights from the discussion.

More car promos

Just a reminder that General Motors Corp.’s “May the best car win” money-back guarantee kicked in this week in an effort to maintain momentum fueled by last month’s cash-for-clunkers federal rebate program.

The Detroit automaker is offering consumers 60 days to decide whether or not they want to keep their new Chevrolet, Buick, GMC or Cadillac vehicles.

If the verdict is no, GM will refund the purchase price and sales tax; the offer runs through Nov. 30. Strings are attached: the guarantee doesn’t apply to leases or used vehicle purchases, the returned car must be damage-free and been driven fewer than 4,000 miles. For complete details, visit GM’s guarantee site. While interesting in itself, the splashy promotion also is a good excuse to check in with local dealers about how they’re faring without the traffic generated by the federal rebate deal. What are they doing to lure consumers to showrooms this fall?

Don’t limit your rounds to GM; other car companies face the same dilemma. For a good primer on how automotive purchase incentives work , as well as a handy sort-by-zip code deal finder, click on the New Car Incentive and Rebates button at the analytics firm Edmunds.com.

Understanding the structure and lingo of these programs will make your dialogue with dealers vastly more sophisticated and productive.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.

All Eyes on Automakers

Monthly U.S. auto sales tallies are always closely watched, but Monday’s numbers will be especially interesting because they’ll reflect a full week of sales under the federal "cash for clunkers" program.

Automotive sales, of course, have spent the past year in a free fall, sending General Motors and Chrysler to bankruptcy court and Capitol Hill for concessions. Thousands of workers have been furloughed, bought out, retired early or laid off.

Here’s how drastic the drop has been: In 2007, U.S. consumers wheeled away in some 16 million new cars trucks. This year, the most upbeat forecasters predict total sales of – maybe – 10 million vehicles. That’s nearly a 40 percent drop in two years – meaning 40 percent less revenue for pretty much the entire supply chain and everyone connected with auto retailers.

So even if you don’t have a car company headquarters or factory in your territory, chances are a good number of your readers have a vested industry in the health of the auto industry.(After all, as taxpayers they now own a majority stake in GM!)

The automakers – including the U.S. units of transplant and overseas companies, report monthly sales a day or two after the last business session of the previous month. Autodata Corp., an information service for the industry, posts the release calendar and year-to-date figures free of charge on its Web site.

The June tally is up now; take a look to make sure you understand the terminology. First you’ll see the year-over-year results – last June compared to this June, in raw numbers and in percentage-point change. (Those are the negative numbers in the third column, for most brands.) The next three columns are cumulative sales year-to-date, compared to the same period in 2008.

You also should understand SAAR – that is, the seasonally adjusted annual rate of sales, a measure of how many cars could be expected to sell in a year if the pace of the current month continues.

Autodata also provides an aggregated spreadsheet at the end of the day to some media outlets; the reports are a valuable shortcut in creating charts and info boxes. The firm has been inundated of late with media requests and might switch to a paid subscription, so don’t put away your calculator just yet. Meanwhile, a polite request to media@motorintelligence.com may just get you a coveted spot on their distribution list.

Another way to prep: Check out the company-by-company forecasts by industry watchers such as Edmunds.com; while not infallible, these predictions can help you get a feel for the story-du-jour in auto sales. Sometimes it’s external forces like the current rebate program; other months it’s the horse race for the No. 1 position or the dive in truck and SUV demand.

Individual company releases (sign up for them at individual automaker media Web sites or via PR Newswire – and do it today, not Monday) come in no particular order and trickle out after noon on the appointed date – leaving you the morning free to troll dealerships for retailer and consumer comments.

Check around today to see if you can sit in on (and video) the closing of a new-car deal Monday morning; hearing the voice of a consumer who decided to take the plunge – and the reasoning behind his or her purchase – will add quite a bit of human interest to what can seem like a dry numbers story. With billions of taxpayer dollars and hundreds of thousands of jobs at stake, car sales reports these days are anything but routine.

Come back to Your Daily Tipsheet each morning for advice on where to find sources, background and creative ways to make financial news and trends relevant to your audience.