Are You Ready for a Recession? [VIDEO]
Dow Jones Index Suffers Worst Start to New Year Since 1904
In economic news, more signs are emerging indicating the country might be heading toward a recession. The reported unemployment rate hit 5 percent in December -- it was the biggest jump in unemployment since a month after the Sept. 11 attacks. The price of oil briefly topped one hundred dollars a barrel for the first time ever last week. On Wall Street, the Dow Jones industrial average suffered its worst start to a new year since 1904. The Nasdaq composite index dropped over five percent last week--its worst start to a new year ever. And the Times of London reports the living standards in Britain are set to rise above those in the United States for the first time since the 19th century.
Ethan Harris, the chief economist at Lehman Brothers, predicted 2008 would be a difficult year for the U.S. economy.
Ethan Harris: "We are going into a very uncertain period for the economy with lots of downside risks. The fact that the stock market started the year on a down note is a reminder that there are significant risks out there, so that's the message. It's just confirming what we knew, which is it's going to be a difficult year. The stock market could be up in the year if the economy can skirt recession, but it's going to be a choppy ride this year. "
President Bush: "This Economy of Ours is on a Solid Foundation" President Bush has attempted to put a positive spin about the recent economic news. President Bush: "While there is some uncertainty, the report is that our financial markets are strong and solid. And I want to thank you for being diligent. This economy of ours is on a solid foundation. But we can't take economic growth for granted. And there are signs that cause us to be ever more diligent in making sure good policies come out of Washington."