Economic Outlook: Crawling back

A crawling recovery (they always crawl) that appeared bruised a day ago righted itself partly as the Shanghai composite index jumped 4.52 percent Thursday.

A lesson in patience, the index lost 125 points Tuesday and gained 126 points the next day in part due to Wednesday’s news of U.S. oil stockpiles declining by 8.4 million barrels in the week ending Aug. 14.

The news gave energy giants PetroChina and China Shenhua a boost — companies large enough to lift confidence across the board. On the day, 22 companies listed on the index bumped up against the daily limit of a 10 percent increase, Financial Times reported.

Confidence spread across the region, with Japan’s Nikkei 225 average up 1.8 percent and the Hang Seng index in Hong Kong up 1.88 percent.

In India, the Sensex index advanced 1.37 percent. Australia’s S&P/ASX gained 0.08 percent.

U.S. markets resisted the downward pull from the Shanghai index Wednesday, feeling a tug early in the day before breaking loose and posting gains.

The Dow Jones industrial average held up, gaining 0.67 percent Wednesday. The S&P 500 advanced 0.71 percent a day before the weekly U.S. job report is released.

U.S. economists do not expect a dramatic shift in first-time jobless benefit claims, which took a sharp turn downward in July and have recently hovered about 560,000 per week. The consensus forecast calls for a drop to 548,000, which would pass as a positive sign that U.S. jobs are coming back.

General Motors Co. was among the headline-grabbers, announcing this week it would increase production by 60,000 cars by the year’s end and call back 1,350 laid-off workers. Ford Motor Co. had made a similar announcement earlier.

While car companies pointed to the cash for clunkers program as the spark behind their sudden success, dealerships began backing out of the program this week, concerned about over-extending themselves as they waited for the government rebate checks to arrive.

I know dealers are frustrated. They’re going to get their money, Transportation Secretary Ray LaHood said.

The government may not have taken into account the thin bank accounts individual retailers use for extending rebates on the government’s behalf. Like it or not, they have limits to what they can do.

The bottom line is the bad outweighs the good, Ken Wondergem, the owner of a Tallahassee, Fla., dealership told The New York Times Thursday.

Wondergem and others said they have risked all they can in doling out rebates without reimbursement. But many, including 1,350 at GM, would disagree that the cash-for-clunkers program was an out-and-out failure.

The program has spent $1.8 billion on rebates for owners who trade in vehicles for cars with higher fuel efficiency. The Times said it is expected the program’s $3 billion allotment will spent by the end of September.

In midday trading in Europe, the FTSE 100 in Britain gained 1.31 percent Thursday. The DAX 30 in Germany rose 1.34 percent. In France, the CAC 30 rose 1.56 percent, while the pan-European DJStoxx 50 rose 1.22 percent.