Do you feel like you’ve lived through this story before?
After months of encouraging economic improvement, America’s engine sounds like it is stalling as summer approaches again. Recent US economic reports had hinted at problems. But the new jobs report issued Friday was a serious downer, worse than the most conservative forecasts. Payrolls increased by just 69,000 -- less than half the 150,000 jobs projected by median forecasts, and the weakest monthly gain in a year.
This cycle -- robust activity in the early months of the year, followed by a relapse in the early summer -- feels like a replay from the very similar pattern of 2011. In fact, we’ve endured two previous false starts.
But the good start this year had seemed sturdier and broadly based, hopefully the start of a truly sustained recovery.
America had been one of the few places around the world to find encouraging economic signals. Europe can’t come to grips with a sovereign debt problem and banking woes. Emerging markets even began to sputter. Even China started to make economists worry.
Investors around the world reacted badly to the news Friday. The Dow Jones industrial average, which had roared ahead during the first quarter of the year, gave up the last of its 2012 gains when it fell 274.88 to 12,118.57. All the leading US stock indexes surrendered more than 2 percent of their value Friday, one of the market’s worst days of 2012.
Meanwhile, money flooded into the safe haven of the US Treasury market. That drove prices higher, which in turn pushed yields to record lows. Investors were willing to take a 1.47 percent yield to own 10-year Treasury notes, the first time the rate ever fell below 1.5 percent. Yields on 30-year Treasury bonds fell to 2.57 percent, the lowest rate since records were first kept in 1953.
One bad economic report isn’t the end of the world. But the disappointing news on jobs is a disturbing signal. Struggles around the globe appear to be catching up with the American recovery.Steven Syre is a Globe columnist. He can be reached at firstname.lastname@example.org.