Monday, August 30, 2010
Global Markets Fall as Investors are Braced for Poor US Economic Results
Poor employment figures and the state of manufacturing have foreign markets concerned that the US will face a second recession. Results of this fear are causing financial markets around the globe to fall. Investors expect this Friday’s report to indicate that 110,000 non-farm jobs were lost in August. This may pressure Ben Bernanke into extending the stimulus plan. However, the fund manager argues that the problem is not liquidity in the banking system but demand. The American public is still skeptical and until that passes and demand increases, stimulus money may not help. Ultimately, weak employment numbers may determine the Fed’s decision regarding additional stimulus money.
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The article said that around 90,000 U.S. jobs were lost in August, but around 26,000 were added. I wonder if these job losses was more due to companies letting people go or more due to temporary jobs, provided by the stimulus, ended. I cannot begin to imagine what would happen if there was a second recession. Hopefully all of this fear of a second one is just the global market over worrying. I think an extention to the stimulus is a good choice to go with. What other choice does the U.S. have at this point? At least until a good portion of the population is finally able to retire. That’s another way to create job openings.
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