On Monday European Central Bank chief Jean-Claude Trichet said that the United States market risks spreading throughout the whole nation’s economy. Trichet was speaking as head of the G10 group of central bankers from industrialized and emerging economies, who met at the Bank for International Settlements.

“There is a probability of fallout on the real economy in the USA,” Trichet said. He also added “We will have to follow very carefully what happens particularly in the USA. We will remain alert, (there is) no time for complacency.”

There became a widespread fear of lack of credit in August which caused the stock market to plummet caused by high numbers of defaults by subprime borrowers in the U.S. housing market. Central banks injected billions of dollars into the global economy just to keep it stabilized.

Analysts on Sunday said that the nation’s economic outlook had darkened with data showing stalling job growth. This has prompted fears that the housing slump would lead into a full blown recession.

Dad has shown that there was a loss in 4,000 payroll jobs in August. Nigel Gault an economist at Global Insight has said that people would be OK as long as employment has held up, and that the economy would keep growing. However, since job growth has stopped people have to start questioning the legitimacy of that statement.

[via Yahoo!]

Tags: Business, Mortgage, Home Owners, Subprime, Subprime Mortgages, Housing, Economy

If you liked this post please consider adding us to your RSS Feed