Recession Risk Rises After Latest Job Numbers
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The risk of recession has jumped after the July jobs data.
The chance of a U.S. recession has jumped from 15% to 25% according to a group of Goldman economists.
Even the U.S. economy’s biggest cheerleader isn’t shrugging off the latest jobs numbers.
The chances of a U.S. recession in the next 12 months have risen from 15% to 25%, a team of Goldman economists led by Jan Hatzius said on Sunday, flagging a July employment report that looked “weak across the board.”
Hatzius and his colleagues have consistently played down the risk of an economic slump over the past year.
But it’d be tough for anyone to feel positive after Friday’s soft nonfarm payrolls data, which reignited worries that the Federal Reserve won’t be able to lower interest rates fast enough to prevent a recession.
Stock futures tumbled on Monday.
Stock futures plunged on Monday as U.S. recession fears caused turmoil throughout the global markets.
The Dow Jones Industrial Average fell more than 800 points, while Nasdaq futures slid over 4%. The S&P 500 also slid by more than 2.5%.
A weak jobs report and shrinking manufacturing activity in the world’s largest economy, coupled with dismal forecasts from the big technology firms, pushed the Nasdaq 100 and Nasdaq Composite into a correction last week.
“While Friday’s employment report was disappointing, it wasn’t the only worrisome economic indicator, only the latest,” said Greg McBride, Bankrate’s chief financial analyst. “Couple economic concerns with the cacophony of earnings disappointments and weak corporate outlooks, global unrest, and currency gyrations, and you have the recipe for sudden volatility.”
