January 04, 2008
Get Ready For Recession
Lower-than-expected job growth in December is roiling markets today, all but ensuring the Fed will further slash the interest rate in an effort to stave off total economic slowdown.
A mere 18,000 jobs were added in December, a far cry from the 70,000 that were projected. According to the Labor Department's monthly report, the unemployment rate also jumped to 5 percent, up from November's 4.7 percent.
A recession isn't assured, of course, but investors and the Fed are bracing themselves for the likelihood. Consumers are also expected to prepare for lean times ahead by cutting back on spending -- which of course is a contributor to recessions.
MarketWatch reports that manufacturing and construction shed the most jobs, the latter sector because of the housing meltdown. The Fed is expected to double a projected 25 basis point rate cut when it meets later this month. The dollar has fallen on the unexpectedly weak jobs report. As of 10:44, the Dow had fallen 174.2 points.
The consensus on Wall Street seems to be that a recession is likely. TheStreet.com agrees. The "genius" investors bleeding in Battery Park have only themselves to blame, writes Robert Lenzner.
