Thursday, August 12, 2010
Trouble Abroad Adds to Worries for U.S. Recovery - NYTimes.com
As economic recovery wavers in the United States, evidence is mounting that growth abroad is also slowing and may be unable to sustain the fragile rebound here.
Concerns about flagging global growth weighed heavily on Asian stocks Thursday, while European markets opened flat. Japan’s Nikkei index dropped more than 2 percent Thursday before recovering some of those losses, which came after steep declines Wednesday in American and European equities.
Those market drops followed a spate of developments signaling a slowing economy both in the United States and abroad. On Tuesday, Federal Reserve officials warned that the pace of recovery in the United States had slowed. Then on Wednesday came news from China suggesting its fast-growing economy was cooling. And later that day, the Bank of England reduced its already diminished forecast for the British economy.
Finally, new trade figures from Washington showed that American exports were faltering, a sign that hard-pressed domestic manufacturers could not rely on overseas markets to ease their pain at home.
Those reports sent the Dow Jones industrial average tumbling in a 265-point decline, moving it back into the red for the year. The broad market fell 2.8 percent. And those declines carried into Asia on Thursday morning.
The optimism that had pervaded Wall Street only weeks ago has faded quickly. In its place is a growing realization of what many Americans have been feeling in their bones: this is not the economic recovery the nation had hoped for. While the economy is growing again, it is growing too slowly to create many jobs or to increase household incomes.