Current Events in November 2015

An automotive magazine reports that Volkswagen will shower diesel owners with money Monday as part of its effort to win back some of the goodwill squandered in the "dirty diesel" scandal.

The Truth About Cars says owners of cars equipped with the 2.0-liter TDI engine will get a $500 cash card they can use anywhere and a second card, worth between $500 and $750, that they can use only at VW dealers. Volkswagen has confirmed it will make an announcement Monday but hasn't gone into detail. 

VW is mired in an avalanche of lawsuits, investigations and regulatory probes following the revelation that its popular TDI "clean diesel" models were equipped with software that reduced noxious emissions when the cars were being tested, then reverted to a dirtier operating mode when the test was over.

The cash awards program will reportedly be announced Monday, Nov. 9. After that date, VW owners can go to www.vwdieselinfo.com/ and input their VIN number to find out if they qualify. About half a million cars with the dirty diesels were sold in the U.S.

The program is, for now, restricted to the 2.0-liter TDI engines found in post-2009 Volkswagen Golf, Jetta, Beetle and Passat models and Audi A3 diesels but could later be expanded to the 3.0-liter engines found in larger VWs, Audis and Porsches, the magazine said.

Cash to customers

In addition to handing out cash to customers, VW is offering dealers a subsidy that lets them take in VW diesels at the valuation they had prior to when the dirty diesel scandal broke this fall. Existing Volkswagen owners are also being offered a $2,000 loyalty discount. 

The subsidies and hand-outs are part of an effort to keep disgruntled customers from dumping their VW diesels and buying a different brand. Volkswagen is hoping to at least keep those disaffected consumers from dumping the brand entirely.

Whether customers will have to agree not to participate in any of the class action suits against Volkswagen in exchange for the largesse isn't known.

When you download a popular app to your Android smartphone, make sure you know the source.

Lookout, a mobile security firm, has found widespread examples of extremely dangerous adware getting onto consumers' phones when they download what they believe is a legitimate app.

Lookout says there are a number of things that make this development worrisome. First, this new generation of malware roots the device when the user installs it, making it, for all intents, a system application.

“Adware, which has traditionally been used to aggressively push ads, is now becoming trojanized and sophisticated,” Lookout's Michael Bentley writes in the company blog. “This is a new trend for adware and an alarming one at that.”

And it gets worse. Consumers are downloading this dangerous new form of adware because it has been integrated into many legitimate and popular apps, including Candy Crush, Facebook, GoogleNow, NYTimes, Okta, Snapchat, Twitter, and WhatsApp.

Third-party source

Bentley says hackers simply repackage and inject malicious code into these popular applications, and then later publish them to third-party app stores. He says many of these apps are actually fully-functional, providing their usual services, in addition to the malicious code that roots the device. That means the user has no way of knowing his or her device has been compromised.

Lookout says it has found thousands of these trojanized apps in third party app stores. When a consumer downloads one of these hijacked apps, it usually means having to buy a new phone, since the malware often can't be removed.

The company says the developers of apps that have been hijacked are also victims, since their brands may suffer with the spread of the malicious adware.

Meanwhile the danger is likely to increase.

“We expect this class of trojanized adware to continue gaining sophistication over time, leveraging its root privilege to further exploit user devices, allow additional malware to gain read or write privileges in the system directory, and better hide evidence of its presence and activities,” Bentley concludes.

Doctors have been complaining loudly about the dramatic price increases that have recently been applied to many prescription drugs. Pharmaceutical investors have been buying the rights to many of these products and inflating their prices exponentially, which has really hurt consumers who rely on them to treat their many ailments.

It seems that these actions have now drawn the attention of the Senate. A special committee has recently sent letters to four large pharmaceutical companies asking for documents to explain the increased prices on certain prescription drugs.

Members of this special committee are extremely concerned about the huge price increases. “Some of the recent actions we've seen in the pharmaceutical industry – with corporate acquistions followed by dramatic increases in the prices of pre-existing drugs – have looked like little more than price gouging,” said Sen. Claire McCaskill (Mo.).

“We need to get to the bottom of why we're seeing huge spikes in drug prices that seemingly have no relationship to research and development costs. I'm proud to help lead this bipartisan investigation so that we can find some answers the public wants and deserves.”

Drug price hikes

The four companies that were sent letters include Turing Pharmaceuticals, Rodelis Therapeutics, Tetrophin Inc., and Valeant Pharmaceuticals. Turing Pharmaceuticals raised the price of a drug meant to treat malaria and toxoplasmosis from $13.50 per pill to $750 per pill; Rodelis Therapeutics acquired the rights to a drug meant to treat drug-resistant tuberculosis – raising the price from $17 per pill to $360 per pill; Retrophin Inc. took over rights for Thiola – a drug used to treat kidney disease – and raised the price from $1.50 per pill to $30 per pill.

The final company, Valeant Pharmaceuticals, has been asked about price increases on three different drugs that it has acquired the rights to. Nitropress, a drug used to treat cardiac arrest, rose in price from $215 per vial to $1,346 – a 625% increase. A similar price increase occurred for another cardiac drug called Isuprel, which went from costing $180 per ampule to $1,472 per ampule. The last drug, Cuprimine, is designed to treat Wilson's disease; it's price rose from $8.88 per capsule to $262 per capsule – an increase of 2,900%.

Inflating health care costs

“The sudden, aggressive price hikes for a variety of drugs used widely for decades affect patients and health care providers and the overall cost of health care. These substantial increases have the potential to inflate the cost of health care for Americans, especially our seniors, by hundreds of millions of dollars each year,” said Sen. Susan Collins (Maine).

“Given the potential harm to patients across our country who rely on these drugs for critical care and treatment, the Senate special Committee on Aging considers these massive price increases worthy of a serious, bipartisan investigation into the causes, impacts, and potential solutions.”

Each company has been asked to present all the requested information to the committee by December 2.  

Consumers will be on the move this Thanksgiving holiday weekend, resulting in a significant rise in air travel, according to Airlines for America (A4A), an industry trade group.

In its annual forecast, the group predicts 25.3 million passengers will travel on U.S. airlines during the 12-day Thanksgiving travel period, a 3% increase over last year and the highest number since the Great Recession.

What's behind the increase? The trade group says an improving economy and still-low gasoline prices have put consumers in the mood to travel over the holiday.

Airlines are expected to add capacity, in the form of larger planes and additional routes, to handle the increase in passenger traffic.

Busiest travel days

According to the airlines' calendar, the Thanksgiving air travel period extends from Friday, Nov. 20 through Tuesday, Dec. 1. Daily passenger volumes are projected to range from 1.4 million to 2.7 million, with the busiest travel days in ranked order expected to be:

• Wednesday, Nov. 25
• Sunday, Nov. 29
• Monday, Nov. 30

To avoid the rush, A4A says your best travel days during this busy period will be Thursday, Nov. 26, and Friday, Nov. 27.

Expanding capacity

“As competition continues to boost schedules and drive down airfares in 2015, customers are seeing more opportunities to fly during the holiday season,” said A4A Vice President and Chief Economist John Heimlich. “Airlines are taking delivery of new, larger aircraft to accommodate the increase in passengers.”

A4A says the continued profitability of U.S. airlines will allow them to increase capacity to meet the short-term increase in holiday demand. Airlines have been more profitable in recent years, since adding fees to baggage and other items that were once provided at no charge. Lower fuel prices have also increased profitability.

During the first nine months of 2015, the 10 largest publicly traded U.S. passenger carriers reported pre-tax earnings of $18.8 billion, resulting in a profit margin of 15.6% – up from 7.7% in 2014.

On a net basis, the group reported $17.9 billion in earnings, or 14.8% of revenues – up from 5.7% in 2014.

The surprisingly-solid gain in jobs in October's employment report sent a very strong signal.

No, not that the economy is improving – which it appears to be.

Rather, that the creation of 271,000 new jobs last month, when the expectation was for only 180,000, means the Federal Reserve is almost certainly going to raise interest rates next month.

The financial markets have been obsessing for years over what the Fed will do about rates, even though the anticipated increase will only be a quarter point. But after nearly a decade of 0% money, even the slightest change gets magnified.

While Wall Street is focused on what this will mean for stocks and bonds, the housing market should also feel the effects. But the real estate market doesn't see rising rates as the big negative -- the equity markets do.

Strong demand

“We should see continuing strong demand for housing in the months ahead if today’s strong jobs report reflects a true return back to a strong growth trend we’ve seen over the last few years,” said Jonathan Smoke, chief economist at Realtor.com. “The healthy strong employment results for the past two years created an uptick in household formation, which has driven increased demand for home purchases and rentals.”

Make no mistake – Smoke believes the strong jobs report will send mortgage rates higher. But he notes that even rates topping 4% are low by historical standards. At the height of the housing bubble, the average mortgage rate was around 6%.

While that might suggest smooth sailing for the housing market, a new report from the National Association of Realtors (NAR) points to some potential trouble spots.

First-time buyers declining

While first-time buyers were active in the market during several months, on an annual basis they make up an increasingly smaller segment of the market.

The NAR report says first-time buyers' share of the market declined for the third consecutive year and remains at its lowest point in nearly three decades. The market is being driven more by repeat buyers who have dual incomes.

"There are several reasons why there should be more first–time buyers reaching the market, including persistently low mortgage rates, healthy job prospects for those college–educated, and the fact that renting is becoming more unaffordable in many areas," said NAR chief economist Lawrence Yun. "Unfortunately, there are just as many high hurdles slowing first–time buyers down.”

Among them, he says, are increasing rents that make it harder for would-be buyers to save enough for a down payment. Also, he says it is still too difficult to get a mortgage.

But a big obstacle, he says, is the tight inventory of available homes. Builders are constructing fewer new homes, and those that are being built tend to be more expensive, well outside the price range of a first-time buyer. There are also fewer existing homes in the entry-level price range.

A lack of entry level homes also has the effect of making those that are on the market more expensive, making this trend harder to break.

As we reported back in June, research shows half of older Americans have no retirement savings.

Other research documents the difficulty young consumers face in putting money away for their retirement years.

To help people get started on a path to saving for retirement, the U.S. Treasury Department has rolled out a simple savings vehicle called myRA, after testing it with a small group of people.

The idea is indeed simple. Consumers can put a small amount of money away on a regular basis – whether it's taken from their paycheck or it comes directly out of a bank account.

It was designed for the millions of people who don't have access to employer–sponsored retirement accounts and those who have found it difficult to save anything.

Removes barriers

“myRA is designed to remove common barriers to saving, and give people an easy way to get started,” said Treasury Secretary Jack Lew. “myRA has no fees, no risk of losing money and no minimum balance or contribution requirements. To make saving easier than ever, you can now put savings into my myRA directly from your bank account.”

Because myRA carries no risk, it also carries very little upside potential. Money is invested in very conservative vehicles that provide very little growth. But for people who are risk averse and new to saving, it might be a good first step.

“myRA can give people confidence that they’re taking steps in the right direction, and it can serve as a bridge to other savings options that will carry them the rest of the way,” said Lew. “myRA alone will not solve the nation’s retirement savings gap, but it will be an important stepping stone for encouraging and creating a nation of savers.”

$15,000 limit

In fact, myRA is meant to be a “starter” savings program. When the account reaches a total of $15,000, it must be rolled over into a traditional retirement savings plan.

The new myRA accounts work like a Roth IRA. The money that is invested can't be deducted from income taxes but neither is the money taxed when it is withdrawn. Earnings – meager though they may be – are not subject to tax.

To participate in myRA, savers or their spouses must have taxable income and follow established Roth IRA rules. Savers can put away as little as a few dollars, up to $5,500 per year – or $6,500 per year for individuals who will be 50 years of age or older at the end of the year.

Participants can also withdraw money they put into their myRA accounts tax-free and without penalty at any time, although Roth IRA requirements apply to the tax free withdrawal of any earnings.

Consumers can get information about myRA and sign up for an account at myRA.gov.

The pace of job creation shot higher last month, as the unemployment rate edged lower.

Figures released by the Department of Labor (DOL) show the economy cranked out 271,000 non-farm payroll positions in October. The unemployment rate, meanwhile, edged down 0.1% to 5.0%.

The explosion in job creation came after two months of tepid results: September with 137,000 and August at 153,000.

The October job gains occurred in professional and business services, health care, retail trade, food services & drinking places, and construction.

On the job

Among the major worker groups, the unemployment rates for adult men (4.7%), adult women (4.5%), teenagers (15.9%), whites (4.4%), blacks (9.2%), Asians (3.5%), and Hispanics (6.3%) showed little or no change last month.

The number of long-term unemployed (those out of work for 27 weeks or more) was essentially unchanged at 2.1 million and has shown little change since June. They accounted for 26.8% of the unemployed in October.

The civilian labor force participation rate was unchanged at 62.4% after dipping 0.2% in September. The employment-population ratio, at 59.3%, also changed little last month and has -- in fact -- shown little movement over the past year.

Who's hiring

Employment in professional and business services increased by 78,000 in October, with gains occurring in administrative and support services (+46,000), computer systems design and related services (+10,000), and architectural and engineering services (+8,000).

Health care added 45,000 jobs in October, while employment in retail trade rose by 44,000. Food services and drinking places added 42,000 jobs last month and has picked up 368,000 positions over the year.

On the other hand, employment in mining continued to trend down in October (-5,000), with the industry losing 109,000 jobs since reaching a recent employment peak last December.

Employment in other major industries, including manufacturing, wholesale trade, transportation and warehousing, information, financial activities, and government, showed little or no change.

Average hourly earnings for all employees on private non-farm payrolls rose by 9 cents -- to $25.20, after adding just a penny in September. Over the year, hourly earnings are up 2.5%.

The complete October employment report is available on the DOL website.

The increase in home prices is continuing into the autumn months.

The CoreLogic Home Price Index (HPI) shows home prices -- including distressed sales -- were up 6.4% in September from the same time a year ago and posted a month-over-month increase of 0.6%.

“After nearly 10 years of very high home price volatility, home price increases have been remarkably stable for the last 15 months, ranging between a 4.8% and 6.5% year-over-year increase,” said Sam Khater, deputy chief economist for CoreLogic. “Home price volatility is now back to the long-term trend prior to the boom and bust which is a good barometer of the market’s stability and health.”

Looking ahead

The CoreLogic HPI Forecast indicates that home prices will increase by 4.7% percent on a year-over-year basis from September 2015 to September 2016, but could potentially dip slightly month over month from September 2015 to October 2015.

The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“The continued growth in home prices is welcome news for many homeowners but more markets are becoming overvalued. In the near term, this trend is likely to continue and pose evaluated risks to the housing economy,” said Anand Nallathambi, president and CEO of CoreLogic.

"More has to be done to expand inventories if we are going to address the emerging affordability crisis, especially in hot markets like California and Colorado.”

Marketdata Enterprises, Inc., is a company that provides independent market research on a wide range of U.S. industries. It's always looking for trends – what industries are up and which ones are down.

It's recent report on the tattoo industry in revealing. It finds businesses that provide tattoos and body piercings are booming. And so are businesses that remove tattoos.

“Tattoos and body art in the U.S. have soared in popularity lately, especially amongst Millennials, fueling an industry comprised of 20,000 tattoo parlors or studios," said John LaRosa, Research Director at Marketdata Enterprises.

The company's research estimates those 20,000 tattoo parlors bring in more than $2.3 billion a year, with an annual growth rate of around 9%.

But growing just as fast – maybe faster – is the burgeoning tattoo removal market, projected to add some $694 million to the industry this year. When you add tattooing and removal together, you get a combined industry worth $3 billion – up from $1.6 billion in 2007.

Market shift

But the market may be changing a bit. Marketdata Enterprises projects tattoo removal – usually performed with lasers by dermatologists – is the bigger growth segment.

“We estimate that the total market grew by 9.5% in 2014 and forecast the same rate for 2015,” the company said. “However, over the next five years, Marketdata analysts think that the tattoo removal market will grow 18% per year, vs. 10% for tattoo parlors.”

The company says there were 110,000 tattoo removal procedures performed by U.S. dermatologic surgeons last year. That's on top of the 52% growth in procedures in 2013.

It costs more to establish a tattoo removal clinic than a tattoo parlor and the removal is performed by medically trained personnel. To remove a tattoo, Marketdata Enterprises says the average costs run about $1,400 over seven sessions.

A Change of Art

A tattoo removal clinic in Baltimore, cleverly named “A Change of Art,” says the cost to remove a tattoo is based on both size and complexity of the art. According to its website, most treatments range from $150 to $180 a session.

As the Mayo Clinic explains it, the method of tattooing – placing ink beneath the top layer of skin – makes tattoo removal more expensive and complicated than getting the tattoo in the first place.

“If you're interested in tattoo removal, consult your dermatologist about the options,” the clinic advises. “Don't attempt tattoo removal on your own. Do-it-yourself tattoo removal creams and other home treatments aren't likely to be effective and can cause skin irritation or other reactions.”

Meanwhile, demographics suggest the tattoo industry – the application of body art and its removal – will continue to be big business. Marketdata Enterprises says over one-third of 25-29 year olds have at least one tattoo, and artists and polls alike show that women are just as likely as men to get a tattoo. 

On January 15, 2009 US Airways Flight 1549 took off from LaGuardia Airport and struck a flock of geese as the plane gained altitude, causing both engines to fail.

Somehow, pilots “Sully” Sullenberger and Jeffrey Skiles glided to a landing on the Hudson River, safely evacuating all 155 occupants to rescue boats that quickly arrived on the scene.

Known as “The Miracle On The Hudson,” the pilots were justifiably celebrated for their skillful handling of the emergency in what was undoubtedly viewed as a great success.

And perhaps, therein lie the seeds of a future disaster.

Risk analysts Peter Madsen of Brigham Young University and Robin L. Dillon and Catherine H. Tinsley of Georgetown University, have studied near-accidents in aviation – where quick action by a flight crew, or even dumb luck, averted a disaster.

Success breeds complacency

When these “near-misses” are celebrated as a success, the researchers say, it tends to breed complacency within the system. In the case of US Airways Flight 1549, an over-abundance of large birds around New York airports wasn't catastrophic – but could have been, and might be in the future to another flight.

“People have a natural tendency to see near-misses as successes rather than as indicators that something is wrong,” said Madsen.

He says airlines successfully learn from near-misses when two conditions are met – when the incident falls into a recognized category, and second, that category is recognized to have previously caused accidents.

It's when these almost-disasters don't fit into a recognized category or fit into a category that isn't currently seen as particularly dangerous that complacency can set in.

Use near-accidents to improve safety

The researchers says airlines should take advantage of these opportunities to collect useful, safety-relevant information.

U.S. commercial airlines are among the world’s safest ways to travel, but the researchers point out that close calls are almost a daily occurrence.

Their study cites an analysis of one month's worth of surveillance data at various airports. It shows that during that one-month period, situations where aircraft were considered to be within three seconds of possible collision occurred eight times at JFK, six times at Minneapolis-St. Paul International Airport, five times at Memphis International Airport, and 21 times at Hartsfield-Jackson Atlanta International Airport. 

The nation's employers announced that they were cutting fewer jobs in October than they did during the previous month.

According to outplacement consultancy Challenger, Gray & Christmas, 50,504 workers were let go during last month, with more than a quarter of them in oil-related jobs, which were at a six-month high.

The October job cut total was down 14% from the 58,877 cuts announced a month earlier and down 1.3% from this time a year ago, when 51,183 terminations were recorded.

A tough year

Employers have now announced 543,935 job cuts so far this year, up 31% from the 414,591 cuts announced by this point in 2014. In fact, the year-to-date total is 13% higher than the 2014 year-end total (483,171).

Nearly one in five job losses this year have been the result of low oil prices. In October, prices were blamed for 13,671 job cuts -- 27% of all cuts announced during the month. That's the highest oil-related job-cut total since April, when 20,675 job cuts were attributed to oil.

Overall, oil prices are responsible for 101,383 job cuts in 2015. Several companies have experienced multiple workforce reductions throughout the year. For example, Chevron announced a second round of cuts in last month, while Halliburton, Schlumberger and Baker Hughes have each reported at least two separate downsizings in 2015. 

Due to the resurgence in oil-related job cuts, the energy sector saw the highest number of planned firings last month – 17,344, more than triple the second-ranked retail sector, which announced 5,153 job cuts in October.

Not surprisingly, the energy sector is the top job-cutting industry for the year, having announced a total of 90,052 job cuts to date. That is up 766% from a year ago, when employers in this sector announced just 10,402 job cuts through October.

Reductions elsewhere

Energy is not the only sector to see a significant increase in job cuts this year. Large-scale cutbacks in the military earlier in the year propelled the government sector to the second spot in the year-to-date job cut rankings. The 69,105 reductions tracked through October is 226% higher than the 21,200 announced by these employers in 2014.

The retail sector has the third highest year-to-date job-cut total -- 64,983 as of last month, up 67% from 38,948 in 2014 to 64,983, as of last month.

“Despite the surge in job cuts across several sectors, it is hardly time to panic,”said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. “While falling oil prices are impacting the bottom lines of companies in the energy and industrial goods sectors, they are helping many other employers, such as those in transportation and plastics manufacturing.

“And, while job cuts are up in the retail and computer sectors,” he added, “these are not necessarily an indication of an economy in decline. Both industries are in a state of flux due to changing consumer and business trends. Many of the cuts we have seen this year in both industries have been the result of companies’ inability to keep up with changes versus an overall decline in demand.”

Challenger also noted that we are heading into what has historically been a period of heavy job cutting, even in the strongest economy. “The fourth quarter is when many companies make adjustments to operations and payrolls in order to hit year-end earnings goals," he said. "We could see an increase in layoffs, but we are just as likely to see an increase in hiring, as companies find themselves shorthanded and unable to meet demand.”

Jobless claims

In a separate report, The Department of Labor (DOL) reports a sizable increase in the number of first-time applications for state unemployment benefits.

Initial jobless claims were up by 16,000 in the week ending October 31, to a seasonally adjusted 276,000. The DOL says there were no special factors affecting the weekly tally.

The four-week moving average, which is not as volatile as the weekly readout and considered a better indicator of the labor market, rose 3,500 from the previous week -- to 262,750.

The complete report is available on the DOL website.

There was a pickup in the pace of growth in the non-manufacturing -- or services -- sector of the economy last month.

The Manufacturing Institute for Supply Management (ISM) Report On Business, produced by the nation’s purchasing and supply executives, says that the non-manufacturing index (NMI) was up 2.2% in October to 59.1%. That represents expansion for the 69th consecutive month. The NMI was down 2.1% in September.

The report also shows that the Non-Manufacturing Business Activity Index came in at 63%, a rise of 2.8% and the 75th straight month of growth at a faster rate. The New Orders Index jumped 5.3% to 62%, and the Employment Index edged up 0.9% from September to 59.2%.

Sector showing

The 13 non-manufacturing industries reporting growth in October -- listed in order -- are:

1. Transportation & Warehousing;
2. Health Care & Social Assistance;
3. Professional, Scientific & Technical Services;
4. Utilities;
5. Retail Trade;
6. Construction;
7. Management of Companies & Support Services;
8. Information; Finance & Insurance;
9. Other Services;
10. Arts, Entertainment & Recreation;
11. Public Administration;
12. Wholesale Trade; and
13. Accommodation & Food Services.

The only industry reporting contraction in October was Mining.

National Video Supply of Santa Clarita, Calif., is recalling RHINO 7 3000 Platinum Capsules.

The product contains active pharmaceutical ingredients not listed on the label

Food and Drug Administration (FDA) analysis found product contains undeclared desmethyl carbondenafil and dapoxetine.

Desmethyl carbondenafil is a phosphodiesterase PDE-5 inhibitor which is a class of drugs used to treat male erectile dysfunction, making this product an unapproved new drug.

Dapoxetine is an active ingredient not approved by the FDA.

The company says it has not received any reports of adverse events.

The product is marketed as a dietary supplement for sexual enhancement and packaged in single 1-count blisters and 6-count bottles with UPC # 700729253748 and distributed to retail stores nationwide. Lot numbers are located on the back top right of the one 1-count and on the side of the 6-count bottles.

National Video Supply has notified its customers of this recall via e-mail and phone.

Customers who purchased the recalled product should stop using it immediately and return it to: 21100 Centre Pointe Park Way, Santa Clarita, Ca. 91350

Joseph Epstein Food Enterprises of East Rutherford, N.J., is recalling approximately 190 pounds of turkey meatball product.

The label declares the product as “gluten-free,” a false negative claim.

There have been no confirmed reports of adverse reactions.

The following product, produced on Oct. 19, 2015, is being recalled:

• 22-oz. cartons of “Mama Mancini’s Slow Cooked Italian Style Sauce and Turkey Meatballs – Gluten Free.”

The recalled product bears establishment number “P-21734” inside the USDA mark of inspection, product code 4740, expiration date “Use by 12/10/15,” and was were shipped to retail locations in New Jersey.

Customers who purchased the recalled product should not consumer it, but throw it away or return it to the place of purchase.

Consumers with questions about the recall may contact Matt Brown at (917) 705-7514.  

Volkswagen Group of America is recalling 91,867 model year 2015-2016 Jetta, Beetle, Beetle Convertible, Passat, Golf/GTI and Golf SportWagen vehicles.

The camshaft lobe that drives the brake vacuum pump may shear off, resulting in a loss of brake assist.

This could lengthen the distance needed to stop the vehicle and increase the risk of a crash.

The remedy for this recall campaign is still under development. Volkswagen will send owners an interim notification by December 22, 2015, and a second notification when a remedy plan has been completed -- currently expected to be in March 2016.

Owners may contact Volkswagen customer service at 1-800-822-8987. Volkswagen's number for this recall is 23R1.

Still reeling from its diesel emissions scandal, Volkswagen has a new problem. About 800,000 of its vehicles understated CO2 emissions during tests.

In response to its admission that some of its TDI diesel cars were actually releasing as much as 40 times the allowable NOx into the atmosphere, the carmaker launched an internal investigation to see how that happened – and whether any other unpleasant surprises might be in store.

The company has now issued a painful clarification.

“During the course of internal investigations, irregularities were found when determining type approval CO2 levels,” the company said in a statement. “Based on present knowledge around 800,000 vehicles from the Volkswagen Group could be affected.”

What the investigation found

Here's what the investigation found. Under the ongoing review of all processes and workflows in connection with diesel engines, it was established that the CO2 levels and the fuel consumption figures for some models were set too low during the CO2 certification process. The majority of the vehicles concerned have diesel engines.

The majority, but not all. Some of the affected vehicles use gasoline – the first time the scandal has spread to that segment of the company's business.

“From the very start I have pushed hard for the relentless and comprehensive clarification of events,” said Matthias Müller, CEO of Volkswagen Aktiengesellschaft. “We will stop at nothing and nobody. This is a painful process, but it is our only alternative. For us, the only thing that counts is the truth. That is the basis for the fundamental realignment that Volkswagen needs.”

He said Volkswagen will cooperate with all responsible authorities and do everything possible to correct the CO2 classification for the affected vehicles.

Unhappy board

In a separate statement, Volkswagen's Supervisory Board said it is “deeply concerned” about the discovery of the CO2 irregularities.

“The Supervisory Board and the special committee set up for the purpose of clarification will meet in the very near future to consult on further measures and consequences,” the Board said. “The Supervisory Board will continue to ensure swift and meticulous clarification.”

Meanwhile, investors continue to punish the German carmaker, driving its stock lower. On the Frankfurt Stock Exchange, VW shares plunged 9% as news of the new emissions issue broke.

Consumers also appear to be handing out some punishment as VW did not take part in October's record sales, enjoyed by other car companies. While October sales industry wide were up double digits, VW managed only a fractional increase over October 2014.

And it was grateful for that.

"We would like to again thank our customers for their patience and loyalty," said Mark McNabb, chief operating officer, Volkswagen of America. "Volkswagen is committed to making things right and actively working to restore trust."