US market recession is almost declared, till now it was just a fear about the condition, by the time Mr. Warren Buffett admitted in his recent Interview and accepted about the chances of recession in US, and it could go even worst till ever happened.
Since US market is predominately considerable and play a major role all over the world' s economy, in all trades and businesses. So it's quite obvious to get scared from this situation.
Being an IT professional it's an obvious concern and worry to look into and know what is the scenario. To know, the fact and figures why are the people really scared about.
Curiously and sacredly I tried to compile the scenarios, which is I am sharing with . Most of the data I have taken the reference with nytimes.
The job market took a serious and unexpected turn for the worse in August, raising fears that the risks of a recession are greater than many economists had believed.
According to "The New York Times" , the economy shed 4,000 jobs between July and August, with industries that are connected to the housing market — like construction and manufacturing — making the deepest cuts, the Labor Department reported today. It was the first employment decline since 2003, when the job market was still struggling to emerge from a long slump in the wake of the 2001 recession.
The unemployment rate held steady at 4.6 percent in August, which economists said was likely a statistical fluke as more people stopped looking for work and were therefore not counted by the government as unemployed.
“If the economy is not headed toward recession, it is very close to one,” said Mark Zandi, chief economist in one of the .com site interview.
Stocks fell broadly and sharply, as investors digested the idea that the economy had been weakening significantly even before the mortgage crisis hit financial markets last month. The Dow Jones industrial average closed down almost 250 points, or 1.9 percent.
The jobs report all but guarantees that the Federal Reserve will cut its benchmark short-term interest rate when its policy-making committee meets on Sept. 18. A quarter-point reduction to 5 percent remains the most probable move, although a half-point cut now cannot be ruled out, economists said.
The weakness of the employment data seemed to change the terms of the debate over the health of the economy. The chances of a recession over the next year now seem to be somewhere between one-quarter and one-half, economists interviewed today said.
“I think at least people need to start thinking about the housing market not just as some ring fence problem which is off on its own, and the rest of the economy is doing just fine,” said Nigel Gault, chief United Economist with Global Insight, an economic research firm in Lexington, Mass. “They need to start worrying about the health of the broader economy.”
The Bush administration tried to defuse concerns that the weak jobs numbers hinted at a wider economic slowdown.
In an interview , the Treasury secretary, said the report was “not totally surprising.”
“There will be news that isn’t always good news,” he said. “But I feel quite strongly that we have a resilient economy.”
For months, Fed officials and Wall Street forecasters have been predicting that the housing slump would slow the economy, but that other strengths — like corporate earnings, growth in other countries and strong wage growth — would keep the slowdown from being severe. That could still happen; in both the 1980s and 1990s economic expansions, employment fell at least once before quickly reversing course.
“The financial turmoil and extended problems in housing put the risks for the economy clearly to the downside — no question,” said Mickey Levy, chief economist for Bank of America. “But there are also factors that suggest a longer period of slower growth, but not recession.”
One of the most worrisome signs in the jobs report was the government’s revision to its employment data for June and July. The new numbers show just under 70,000 jobs created in each of the two months, down from an average of almost 110,000 according to its initial estimates.
In 2005 and 2006, the average monthly job growth was slightly above 200,000.
The sharp slowdown this year suggests that some employers have already begun to see a downturn in their business and others believe that one is on the way. With falling house prices in most of the country and rising oil prices, consumer spending has slowed modestly in recent months.
State and local government agencies, many of them dealing with budget shortfalls connected to the housing slump, have also cut an average of 27,000 jobs a month over the last three months. But economists said the declines in government employment, especially in schools, may have reflected seasonal quirks that made the job market look worse last month than it truly was.
Hospitals, doctors’ offices, restaurants and retailers all added jobs in August.
But the bright spots were few and far between. Employment in the finance sector — which includes real estate agencies and accounts for about 8.5 million of the country’s 138 million jobs — was flat in August, which could be a sign that the government numbers have not yet captured some of the mortgage-related job cuts now occurring.
The surveys that made up the Labor Department report measured employment from Aug. 12 to Aug. 18, when the credit squeeze and subsequent stock market turmoil were under way but not fully felt. Since then, some large lenders like Countrywide and Lehman Brothers have continued to lay off workers. And just today, IndyMac Bancorp, a large mortgage lender, said it would be cutting about 1,000 jobs over the next several months.
“There probably was not that much influence in the data from the credit shock,” said Richard Berner, chief United States economist at Morgan Stanley. “So I think more weakness in the economy is likely. The economy is clearly losing momentum.”
The extent to which the economy continues to lose momentum will determine the Fed’s course of action. The price of a futures contract tied to Fed policy shows that the central bank will probably cut the benchmark rate, now at 5.25 percent, to 4.5 percent by the end of the year. But a growing number of economists are saying that might not be soon enough.
Mr. Gault of Global Insight, who is forecasting a half-point cut on Sept. 18, said it would send “an important message that the Fed sees there are real problems here, there’s a real threat, and it needs to have a response that’s commensurate to that threat.”
Although the unemployment rate held steady at 4.6 percent, the percentage of adults with jobs fell to 62.8 percent, from 63 percent in July and a peak of 63.4 percent in December. The number of people who were neither working nor looking for work — and thus considered neither employed nor unemployed by the government — rose by almost 600,000 in August.
“That’s a sign of economic weakness,” Mr. Anderson, of Wells Fargo, said. “Perhaps people just gave up trying to find jobs.”
The number of people with part-time jobs who said they would prefer to full time has also been rising in recent months. In August, the Labor Department classified 4.5 million workers as “part time for economic reasons,” up from 4.3 million in July.
Wage growth, which often lags behind job growth, did continue at roughly its recent pace. Average hourly earnings for rank-and-file workers — who make up about four-fifths of the work force — have increased 3.9 percent over the last year, to $17.50. Inflation has been running at about 2.5 percent a year.
Wall Street had eagerly awaited the jobs report because it was the most significant economic data released since financial markets began to tumble in early August. If the jobs report had been merely lackluster, it might have been welcomed by investors as a sign that a Fed rate cut all but certain and the economy was still growing at a healthy pace.
The reversal in job growth, however, was far different from the gain of roughly 100,000 jobs that Wall Street was expecting, raising worries that corporate profits will weaken as the market upheaval moves beyond the housing and financial sectors.
Since US market is predominately considerable and play a major role all over the world' s economy, in all trades and businesses. So it's quite obvious to get scared from this situation.
Being an IT professional it's an obvious concern and worry to look into and know what is the scenario. To know, the fact and figures why are the people really scared about.
Curiously and sacredly I tried to compile the scenarios, which is I am sharing with . Most of the data I have taken the reference with nytimes.
The job market took a serious and unexpected turn for the worse in August, raising fears that the risks of a recession are greater than many economists had believed.
According to "The New York Times" , the economy shed 4,000 jobs between July and August, with industries that are connected to the housing market — like construction and manufacturing — making the deepest cuts, the Labor Department reported today. It was the first employment decline since 2003, when the job market was still struggling to emerge from a long slump in the wake of the 2001 recession.
The unemployment rate held steady at 4.6 percent in August, which economists said was likely a statistical fluke as more people stopped looking for work and were therefore not counted by the government as unemployed.
“If the economy is not headed toward recession, it is very close to one,” said Mark Zandi, chief economist in one of the .com site interview.
Stocks fell broadly and sharply, as investors digested the idea that the economy had been weakening significantly even before the mortgage crisis hit financial markets last month. The Dow Jones industrial average closed down almost 250 points, or 1.9 percent.
The jobs report all but guarantees that the Federal Reserve will cut its benchmark short-term interest rate when its policy-making committee meets on Sept. 18. A quarter-point reduction to 5 percent remains the most probable move, although a half-point cut now cannot be ruled out, economists said.
The weakness of the employment data seemed to change the terms of the debate over the health of the economy. The chances of a recession over the next year now seem to be somewhere between one-quarter and one-half, economists interviewed today said.
“I think at least people need to start thinking about the housing market not just as some ring fence problem which is off on its own, and the rest of the economy is doing just fine,” said Nigel Gault, chief United Economist with Global Insight, an economic research firm in Lexington, Mass. “They need to start worrying about the health of the broader economy.”
The Bush administration tried to defuse concerns that the weak jobs numbers hinted at a wider economic slowdown.
In an interview , the Treasury secretary, said the report was “not totally surprising.”
“There will be news that isn’t always good news,” he said. “But I feel quite strongly that we have a resilient economy.”
For months, Fed officials and Wall Street forecasters have been predicting that the housing slump would slow the economy, but that other strengths — like corporate earnings, growth in other countries and strong wage growth — would keep the slowdown from being severe. That could still happen; in both the 1980s and 1990s economic expansions, employment fell at least once before quickly reversing course.
“The financial turmoil and extended problems in housing put the risks for the economy clearly to the downside — no question,” said Mickey Levy, chief economist for Bank of America. “But there are also factors that suggest a longer period of slower growth, but not recession.”
One of the most worrisome signs in the jobs report was the government’s revision to its employment data for June and July. The new numbers show just under 70,000 jobs created in each of the two months, down from an average of almost 110,000 according to its initial estimates.
In 2005 and 2006, the average monthly job growth was slightly above 200,000.
The sharp slowdown this year suggests that some employers have already begun to see a downturn in their business and others believe that one is on the way. With falling house prices in most of the country and rising oil prices, consumer spending has slowed modestly in recent months.
State and local government agencies, many of them dealing with budget shortfalls connected to the housing slump, have also cut an average of 27,000 jobs a month over the last three months. But economists said the declines in government employment, especially in schools, may have reflected seasonal quirks that made the job market look worse last month than it truly was.
Hospitals, doctors’ offices, restaurants and retailers all added jobs in August.
But the bright spots were few and far between. Employment in the finance sector — which includes real estate agencies and accounts for about 8.5 million of the country’s 138 million jobs — was flat in August, which could be a sign that the government numbers have not yet captured some of the mortgage-related job cuts now occurring.
The surveys that made up the Labor Department report measured employment from Aug. 12 to Aug. 18, when the credit squeeze and subsequent stock market turmoil were under way but not fully felt. Since then, some large lenders like Countrywide and Lehman Brothers have continued to lay off workers. And just today, IndyMac Bancorp, a large mortgage lender, said it would be cutting about 1,000 jobs over the next several months.
“There probably was not that much influence in the data from the credit shock,” said Richard Berner, chief United States economist at Morgan Stanley. “So I think more weakness in the economy is likely. The economy is clearly losing momentum.”
The extent to which the economy continues to lose momentum will determine the Fed’s course of action. The price of a futures contract tied to Fed policy shows that the central bank will probably cut the benchmark rate, now at 5.25 percent, to 4.5 percent by the end of the year. But a growing number of economists are saying that might not be soon enough.
Mr. Gault of Global Insight, who is forecasting a half-point cut on Sept. 18, said it would send “an important message that the Fed sees there are real problems here, there’s a real threat, and it needs to have a response that’s commensurate to that threat.”
Although the unemployment rate held steady at 4.6 percent, the percentage of adults with jobs fell to 62.8 percent, from 63 percent in July and a peak of 63.4 percent in December. The number of people who were neither working nor looking for work — and thus considered neither employed nor unemployed by the government — rose by almost 600,000 in August.
“That’s a sign of economic weakness,” Mr. Anderson, of Wells Fargo, said. “Perhaps people just gave up trying to find jobs.”
The number of people with part-time jobs who said they would prefer to full time has also been rising in recent months. In August, the Labor Department classified 4.5 million workers as “part time for economic reasons,” up from 4.3 million in July.
Wage growth, which often lags behind job growth, did continue at roughly its recent pace. Average hourly earnings for rank-and-file workers — who make up about four-fifths of the work force — have increased 3.9 percent over the last year, to $17.50. Inflation has been running at about 2.5 percent a year.
Wall Street had eagerly awaited the jobs report because it was the most significant economic data released since financial markets began to tumble in early August. If the jobs report had been merely lackluster, it might have been welcomed by investors as a sign that a Fed rate cut all but certain and the economy was still growing at a healthy pace.
The reversal in job growth, however, was far different from the gain of roughly 100,000 jobs that Wall Street was expecting, raising worries that corporate profits will weaken as the market upheaval moves beyond the housing and financial sectors.
<<All these data, statistics and above figure stats, I have complied through internet sites and other sources.>>
