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The risk of recession has soared following July’s employment report.
The chance of a U.S. recession has jumped to 25% from 15% according to a group of Goldman economists.
Even the U.S. economy’s biggest cheerleaders are not ignoring the latest jobs numbers.
A team of Goldman economists led by Jan Hatzius said on Sunday that the chance of the U.S. falling into a recession in the next 12 months has risen to 25% from 15%, pointing to “generalized weakness” in July’s jobs report.
Hatzius and his colleagues have consistently downplayed the risks of an economic downturn over the past year.
But it’s hard to feel optimistic for anyone, with soft nonfarm payroll data on Friday rekindling concerns that the Federal Reserve may not be able to cut interest rates fast enough to stave off a recession.
Stock futures fell sharply on Monday.
Stock futures fell sharply on Monday as fears of a U.S. recession caused turmoil across global markets.
The Dow Jones Industrial Average fell more than 800 points, Nasdaq futures fell more than 4%, and the S&P 500 fell more than 2.5%.
The Nasdaq 100 and Nasdaq Composite indexes entered a correction last week due to weak employment data from China, the world’s largest economy, a decline in manufacturing activity and a bleak outlook for big technology companies.
“Friday’s jobs report was disappointing, but it was merely the latest in a series of worrying economic data,” said Greg McBride, chief financial analyst at Bankrate. “Add to that economic uncertainty a cacophony of disappointing earnings, weak corporate prospects, global worries and currency fluctuations, and you’re bound to see some sudden volatility.”
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