The global equities markets initiated the week with a significant plunge, triggered by apprehensions of an impending US recession, estimated at 25 percent by Goldman Sachs economists. The Dow Jones Industrial Average plummeted by 945 points, equivalent to almost 2.5 percent, closing at 38,791.28.
On Friday, if you had $100 in a fund tracking the Dow, you would now have about $97.50. The other major indexes, the S&P 500 and the Nasdaq Composite were down mid-morning by roughly 3% and 6%, respectively. By the end of the session, the Dow was down 2.6%, sliding more than 1,000 points overall.
By the closing bell, the S&P fell 160 points (3%), and the Nasdaq dropped 576 points (3.4%). According to Goldman’s chief economist, Jan Hatzius, who predicted the 2008 US recession, the chance of an economic downturn in the next 12 months has risen 10 points to 25%.
The latest jobs report showed a slowdown in US job growth, with only 114,000 new jobs added, missing expectations. Unemployment rose from 4.1 percent to 4.3 percent. The Federal Reserve has room to cut interest rates and can do so quickly if needed. Also, the July jobs report may not indicate a trend, as it included many temporary layoffs rather than permanent cuts, according to Hatzius.
President Harry S. Truman once jokingly said, “It’s a recession when your neighbor loses his job. It’s a depression when you lose yours.”
The National Bureau of Economic Research (NBER) Business Cycle Dating Committee officially determines a recession. They define it as “a significant decline in economic activity spread across the economy that lasts more than a few months.”
The committee analyzes employment numbers, real personal income, sales, industrial production, and consumer spending, adjusting assessments based on a holistic look at the data, according to the White House Council of Economic Advisers.
A recession is usually associated with a 2 percent decline in GDP, with severe recessions seeing declines of 5 percent. It can be triggered by higher asset prices, constricting supply, mistimed economic policies, rising unemployment, and housing market crashes.
The IMF notes that each recession is unique but typically lasts about a year. The most recent US recession, called “The Great Recession,” occurred from December 2007 to June 2009. It was due to a sharp decline in home prices, the collapse of the subprime mortgage market, and the failure of Lehman Brothers.
According to the Federal Reserve, the recovery was slow, with “moderate” economic growth and high unemployment levels. Recent unemployment numbers have concerned investors due to the Sahm Rule, a recession predictor named after its creator, former Federal Reserve economist Claudia Sahm.
The Sahm Rule states that a recession occurs when the three-month moving average of the US unemployment rate is at least half a percentage point higher than the 12-month low. The Great Depression lasted from 1929 to 1933, with GDP falling by around 30 percent and unemployment reaching 25 percent.
Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.
1 Timothy 6:10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
Hebrews 13:5 Let your conversation be without covetousness; and be content with such things as ye have: for he hath said, I will never leave thee, nor forsake thee.
Matthew 6:19 Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal:
Matthew 6:20 But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal:
Matthew 6:21 For where your treasure is, there will your heart be also.
Matthew 6:24 No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and money.
1 John 2:15 Love not the world, neither the things that are in the world. If any man love the world, the love of the Father is not in him.
1 John 2:16 For all that is in the world, the lust of the flesh, and the lust of the eyes, and the pride of life, is not of the Father but is of the world.
1 John 2:17 And the world passeth away, and the lust thereof: but he that doeth the will of God abideth for ever.
Read more at: Are you Being Taught the Fullness of Life Before Death or Life After Death? (transformedbythetruth.com)
Read more at: Stock Market Tumbles After Global Selloff as Investors Panic (transformedbythetruth.com)
Read more at: Global stock market meltdown: fears US economy will “collapse” (transformedbythetruth.com)
Read more at: The US economy is flashing a Recession Warning (transformedbythetruth.com
Read more at: https://www.transformedbythetruth.com/a-global-economy-in-growing-danger-of-a-depression/
Read more at: New study predicts major threat to global food production (transformedbythetruth.com)
Read more at: https://www.transformedbythetruth.com/billionaires-plan-is-a-great-reset/
Click here to read more articles transformedbythetruth.com