But the recovery can still recover. Here's how we got in this mess -- and how we might yet get out.
The economic panic attack just went global.
Stocks are collapsing across the world from London to New York to Tokyo. The Dow plunged
300 513 points* and the S&P fell even farther, as U.S. markets suffered the worst nine-day slump since
March 2009. Meanwhile two-year Treasuries hit a record low. Central banks are intervening in Japan and Europe. Everything seems to be falling apart at once. Why? And can the U.S. avoid slipping back into recession?
Before we continue hyperventilating, let's review how we got here.
A Month of Awful News
June was a very weak month for the U.S. economy, and our data from July so far isn't looking good. Some quick highlights:
- Hiring was nearly stagnant in May and June.
- Real consumer spending fell from April through June.
- Small business optimism has been falling four months running.
- Home sales continue to struggle.
- The manufacturing sector is flirting with contraction.
- U.S. growth was less than 1% in the first half.
These would all be very bad signs in a healthy economy. In a weak recovery -- a time when business activity should be above average -- they're even worse. Although we appeared to climbing out of the abyss in early 2011, it no longer looks like we're even treading water. In fact, we may be drowning again.