News / Economy

US Jobs Data Adds To Global Recession Fears

US Jobs Data Adds To Global Recession Fearsi
|| 0:00:00
X
Mil Arcega
July 07, 2012 12:43 AM
Stock prices retreated on Friday following another weak U.S. jobs report. U.S. companies added only 80,000 jobs last month, the third straight month of tepid job growth. Although the unemployment rate held steady at 8.2 percent, the weaker than expected employment numbers are adding to worries that the global recovery is running out of gas. Mil Arcega has more.

US Jobs Data Adds To Global Recession Fears

Stock prices retreated on Friday following another weak U.S. jobs report.  U.S. companies added only 80,000 jobs last month, the third straight month of tepid job growth.  Although the unemployment rate held steady at 8.2 percent, the weaker than expected employment numbers are adding to worries that the global recovery is running out of gas.

The U.S. government's closely-watched monthly employment report has become an important barometer of the state of the world's largest economy.  Combined with the debt crisis in Europe, and manufacturing slowdowns in Asia, Friday's jobs report paints a picture of a global economy in decline.

"The U.S. economic recovery remains tepid and downside risks have intensified," said the International Monetary Fund's Managing Director, Christine Lagarde..

The risks include a sharp decline in business confidence, due to the failure of European leaders to find a comprehensive solution to what is now a three-year-old crisis.  But Standard and Poor's Chief Equity Strategist Sam Stovall says it's not entirely the fault of Europe's leaders.

"I think politicians here in the U.S. as well have not done their job of instilling confidence on Wall Street as well as on Main Street and giving businesses reason to expand," Stovall said.

Both Lagarde and Stovall point to political discord in the U.S. Congress, and the possibility that lawmakers will once again be unable to agree on a deficit cutting plan and the expiration of tax cuts by the end of the year. Should that happen, Stovall believes the Federal Reserve is likely to step in with a third round of Quantitative Easing -- essentially pumping more dollars into the economy to stimulate growth.

"If the politicians allow us to fall off the fiscal cliff because of the sequestration, the forced cuts to medicare, to spending as well as the increases in taxes which the Congressional Budget Office has said, would likely throw us into recession," Stovall said.

Despite an increasingly dismal outlook and a Europe that most economists believe is already shrinking, Stovall says the risk of a much larger global recession remains small.

"Investors and people on Main Street are very worried that we slip back into recession, if not on our own, then at least dragged into it because of Europe and because of China, but right now the belief is that no, we probably will be able to skirt it," Stovall said.

The ratings agency projects China's economy will grow around 8 percent this year, with the U.S. economy picking up strength in the second half of 2012 with about 2 percent growth.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.