After ups and downs and mixed economic messages, Wall Street is retrenching on renewed fears that the US economy is sinking fast and seems likely to enter a recession, analysts say.
The latest US data, including a grim unemployment report on Friday, appear to have settled debate about where the economy is headed, dashing hopes for a quick rebound in the US even as conditions slow in Europe and elsewhere.
“If there was any lingering doubt, yep, it’s a recession, and the fourth quarter is shaping up to be an ugly quarter,” economist Scott Anderson at Wells Fargo Economics said.
“You could almost hear the bulls on Wall Street throwing themselves on their swords over the past five trading days. The payroll report should end the debate that the economy is doing well,” he said.
Dina Cover, economist at TD Bank Financial Group said the “dismal US economic data had a disheartening effect on stock markets.”
“The eight-month string of job losses reaffirms that US consumers have quite a bumpy road ahead, which does not bode well for economic growth in the coming quarters,” she added.
In the holiday-shortened week to Friday, the blue-chip Dow Jones Industrial Average slumped 2.8 percent to end at 11,220.96.
The broad-market Standard & Poor’s 500 index lost 3.16 percent to 1,242.31 and the technology-heavy NASDAQ composite retreated 4.2 percent to 2,255.88.
The US unemployment rate spiked to a five-year high of 6.1 percent last month with 84,000 jobs lost. Auto sales were down sharply from last year’s levels, raising fears about consumer spending and the factory sector.
The reports dampened hopes for a recovery that had been fueled by data showing a robust 3.3 percent growth rate in US gross domestic product in the second quarter — a report that some said was distorted by one-time factors.
The latest data on the labor market “confirms that the improvement in GDP growth to 3.3 percent in the second quarter was just a head-fake,” said Nigel Gault, economist at Global Insight.
For the US Federal Reserve, which has held rates steady at 2 percent while hinting at a rate increase, the payrolls report “confirms that the notion of a rate hike to combat inflation is fanciful — the question now is rather whether the Fed might need to cut again,” Gault said.
The coming week holds some promise, at least in terms of economic data that may be easier to swallow, he said.
Thursday’s report on inflation at the wholesale level is likely to show a decline, reflecting the sharp retreat in energy costs, according to Global Insight economists. This may ease pressure on the Federal Reserve, allowing the central bank to keep interest rates low to stimulate a recovery.
Bond prices rallied as investors looked for a safe haven. The yield on the 10-year Treasury bond fell to 3.660 percent from 3.813 percent a week earlier, while that on the 30-year bond eased to 4.276 percent against 4.412 percent. Bond yields and prices move in opposite directions.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)