Fresh evidence of a global economic slowdown has raised fears that governments around the world may be powerless to reverse it. If the world does fall into back into recession, it could be much harder to escape than the contraction that ended in 2009.
With banks still recovering from a decade-long credit bubble, governments slashing spending to cope with unsustainable debt, and unemployment at levels not seen in decades, a new recession would be “disastrous,” according to Roger Altman, a senior Treasury official in the Clinton administration.
Two years after the latest U.S. recession technically ended, evidence continues to build that the weak recovery is stalling out. The U.S. economy stopped producing new jobs in August after a string of mostly meager monthly job gains that failed to bring the unemployment rate below 9 percent.
On Thursday, fresh data showed the Eurozone's service sector contracting for the first time in two years; a separate index of the manufacturing sector, which has provided much of the region’s growth, slowed for the second month in a row.
A global stock sell-off that dragged market indices to their lowest level of the year spread to the U.S., where the Dow Jones industrial average was down nearly 400 points.
European central bankers appear increasingly unable to contain a widening banking crisis, sparked by the threat of bond defaults in Greece and Italy, Europe’s third-largest economy.
The International Monetary Fund warned Tuesday that Europe and the United States could slip back into recession next year without bold action
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