Honeymoon period? What honeymoon period?
Britain’s brand-new government has found itself facing a fiscal crisis, forcing unplanned cuts to public spending and (probably) tax rises. Far-right thugs are rioting on the streets. Now we have a market meltdown adding to the toxic mix.
The turmoil in the markets is starting to look serious. And the consequences could be serious, too – with the impact felt far beyond a potentially bruising bonus season for bankers.
First to the causes. A poor earnings season, and outsize spending on AI, were what initially sparked a correction in the tech sector. But what has really got Wall Street’s bears sharpening their claws are the growing fears about prospects for the wider US economy.
Both international and domestic investors have started to lose confidence in it. Last week’s figures from the US Bureau of Labor Statistics, were bad, so bad that they caught economists on the hop. Just 114,000 jobs were added in July, far below forecasts which called for around 175,000 new roles, and a sharp drop on the 179,000 created the previous month. In an average month over the previous year, some 215,000 new jobs were created.
If these numbers represent more than a blip, if they are in fact telling a story, things could quickly get sticky. Note that the US unemployment rate also rose, to 4.3 per cent – the fourth consecutive monthly increase.
Esta historia es de la edición August 06, 2024 de The Independent.
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