Turbulence

By Isaac Cohen*

Volatility has been haunting world financial markets since the start of the year. In the United States, after the worst starting week of any year of its history, in January, the Standard & Poor’s 500 Stock Index fell 5.1 percent and so far this month it has fallen 3.9 percent.

Several factors are contributing to this turbulence, initially perceived as short lived. The slowdown in the Chinese economy and  hesitations among its policy makers, together with the fall in oil prices and the consequences for energy companies and for the banks that have financed them, all have contributed to the stock market correction. Additionally, there is concern about the timing of the next anticipated increase in the federal funds rate by the US central bank.

However, in contrast to financial market perceptions, other domestic indicators point to solid economic performance. For instance, unemployment in January decreased to 4.9 percent and wages are increasing, while household spending increased, in vehicles, groceries and building materials, spurred by the fall in gasoline prices.

During her last testimony in Congress, asked about the risk of a recession, Federal Reserve Chairwoman Janet Yellen said “there is always some chance of a recession in any year, but the evidence suggests expansions don’t die of old age.”

*International analyst and consultant. Commentator on economic and financial issues for CNN en Español TV and radio. Former Director, UNECLAC.

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About Ramón Jiménez

Ramón Jiménez, actual Managing Editor de MetroLatinoUSA. Periodista que cubre eventos de las comunidades latinas en Washington D.C., Maryland y Virginia. Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia. Galardonado en numerosas ocasiones por parte de la Asociación Nacional de Publicaciones Hispanas (NAHP) y otras organizaciones comunitarias y deportivas de la región metropolitana de esta capital. También premiado en dos ocasiones como Mejor Periodista del Año por la cobertura de la comunidad salvadoreña; premios otorgados por la Oficina de Asuntos Latinos del Alcalde de Washington (OLA) y otras organizaciones. Ha sido miembro del jurado calificador en diferentes concursos literarios, de belleza y talento en la región metropolitana. Ha visitado zonas de desastre en Nicaragua, Honduras y El Salvador e invitado a esos países por organizaciones que asisten a personas de escasos recursos económicos. Antes trabajó en otros medios de prensa de Virginia y Washington, D.C., incluyendo reportajes para una agencia noticiosa mundial.

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