Bad news has hit the United States of America as the country that has been comfortably the fastest-growing of the G7 after the Covid pandemic is heading for recession.
The recent data indicated that global stock markets have been in a slump for the past few days.
Currently, trading screens across the US, Asia and, to a certain extent, Europe are awash with blinking red numbers which shows that the US economy is slowing down.
It was expected that US employers could create about 175, 000 in July but the US jobs data for July, which was released on Friday, August 2, 2024 but payroll growth in July slowed to 114,000.
The figure is about half the average of 215,000 in the previous 12 months.
Unemployment rate, which has been low by historic standards in the US, has risen from 4.1% to 4.3%, a near three-year high, which triggered something known as the “Sahm rule”.
Last year, the unemployment rate was low at 3.5%.
Some economists warn against putting too much store by the Sahm rule. Dhaval Joshi, an analyst at BCA Research, said: “A decoupling between robust growth in the economy and steadily rising unemployment is unprecedented in our lifetimes. Through the past 60 years, whenever the US unemployment rate has increased by 0.5% in a year, taking it to the cusp of recession, GDP growth has also been on the cusp of recession. That is, until now.”
Last week, the US Federal Reserve voted not to cut interest rates. Meanwhile, other central banks within developed economies, including the Bank of England and the European Central Bank, have recently cut interest rates.
Some political analysts observed that the current economic situation in the US can negatively affect Vice President and Democratic Presidential Nominee, Kamala Harris’s chances of winning the November elections.
Former US President who is the Presidential Nominee for the Republican, Donald John Trump has accused the Joe Biden administration of messing up the US economy.
Trump has promised to turn the US economy around if voted as the President again.
Source: Elvisanokyenews.com
