Good morning! It’s Daniel de Visé with your Daily Money.
Well, if you're one of those people who checks your IRA balance at every meal, you may want to take a day off.
Friday was bad on the American stock market. Today could be worse. Last week's "sell-off" escalated into "a rout" in global markets Monday, the New York Times reported, using Wall Street parlance for bad and worse. In Japan, the Nikkei index fell more than 12%, its worst one-day decline ever, worse than anything in the Great Recession of 2008.
From Asia, the "unease" -- dare we say "panic"? -- spread to Europe, where markets were down about 2% in early trading.
How bad will things get here in the U.S.? Here is our coverage.
The number of jobs added last month fell short of expectations, and unemployment rose, triggering a measure that has typically meant the U.S. is in a recession, Charisse Jones reports.
Yet, the economy has been unusually defiant, with the nation’s gross domestic product continuing to grow, and employment trends reflecting the unusual forces that came into play during the COVID-19 pandemic, which dramatically disrupted the labor market.
That combination of factors has led most economists to determine that the "Sahm rule" probably doesn't apply right now. But, for roughly five decades, it has predicted every downturn. (If you're trying to place the name, we can assure you the rule has nothing to do with Texas multi-instrumentalist Doug Sahm.)
What is the Sahm rule?
Given today's events, you may want a recap of what happened to the U.S. stock market on Friday.
Surprisingly weak employment data stoked fears of recession, prompting investors to dump stocks, Reuters reported.
Job growth slowed more than expected in July, new data showed, and unemployment increased to 4.3%, pointing to possible weakness in the labor market and greater vulnerability to recession.
Markets were already rattled by downbeat earnings updates from Amazon and Intel and other recent economic returns. And all of this happened in the same week the Federal Reserve waved off an interest-rate cut, on the theory that the American economy is a-okay.
Read the story.
Each weekday, The Daily Money delivers the best consumer and financial news from USA TODAY, breaking down complex events, providing the TLDR version, and explaining how everything from Fed rate changes to bankruptcies impacts you.
Daniel de Visé covers personal finance for USA Today.
