Investors painted a rather grim picture Thursday as stocks around the world took a nosedive following investors’ concerns about decelerated economic growth and worsening economic woes in the U.S. and Europe, according to a recent New York Times article. Even though the stock markets have struggled for about two weeks, Thursday’s was the biggest one-day drop — almost 5 percent — in more than two years.
Just as the country breathes a collective sigh of relief following the resolution of the debt ceiling fiasco — which at times felt like a political circus for which the nation had front-row seats — we are left to grapple with the reality that the U.S. might be staring a double-dip recession in the face.
So, how did things seemingly spiral out of control?
“With the policymakers out of bullets and the economy slowing, the market is re-pricing the possibility of a genuine double-dip recession,” John Richards, head of strategy at Royal Bank of Scotland in the Americas, was quoted as saying in a recent Huffington Post article. “You’ve ... increased the risk of the double dip from one-in-20 to one-in-five, or maybe one-in-three. That's enough to cause a major sell-off in a market like this.”
Grim numbers continue to waft our way, including recent news that the manufacturing sector remained relatively stagnant last month and consumer spending showed declines in June — for the first time in almost two years.
Then we hear about ever-so-tiny silver linings.
Just this morning, the Bureau of Labor Statistics released a new jobs report. Even though 117,000 jobs were added last month and the unemployment rate declined slightly (from 9.2 percent to 9.1 percent), it’s hardly an economic boon, another Huffington Post piece suggested. The drop can be attributed in large part to individuals who were trying to break into the workforce just giving up.
There’s no question the economy is fragile and the stock markets volatile. Still, no one can say with certainty it’s all doom and gloom.
About a month ago, a Chicago Tribune article analyzed the results of a recent study by the National Retail Federation which revealed an increase in retail theft by employees. Now, before you vacate your seat to lock up your belongings, this finding was oddly enough interpreted as good news — well, in a way.
The piece went on to state that many employees kept their hands to themselves during the depths of the recession because they feared losing their jobs at a time when they were scarce; but now, many wandering eyes are back as employees are more prone to taking risks — and some particularly disgruntled ones even feel entitled to the loot.
An oddly interesting spin on a serious issue, but the health of our economy continues to waver with each passing day. It seems the only thing we can feel assured about is the unpredictable nature of things beyond our control. And if some experts are to be trusted, things will continue to get worse before they get better.