Recession risk is on the rise, and that equates to Americans feeling uneasy about what the future holds as the unemployment rate jumps and stocks crash.
You don’t need to work in the financial district to recognize the potential far-reaching impact of a worldwide market crisis. Such an event could reverberate through communities, impacting job security and household finances.
Fox Business is monitoring the risk of a recession, mentioning on Monday that Wall Street’s fear gauge surged to its highest level in over four years.
Here is more of what Fox Business had to say:
Wall Street’s fear gauge spiked early Monday to the highest level in more than four years amid a global market meltdown.
The Cboe Volatility Index, or VIX, helps measure the level of fear among investors. It jumped as much as 172% to 62.27 before trading opened Monday. That marks the highest level for the index since March 2020, at the onset of the COVID-19 pandemic, when the gauge rose as high as 85.47.
The VIX index is based on the price of S&P 500 stock options and is used to measure expected volatility.
Since the start of the pandemic, the VIX index has been relatively stable, never closing above 40. But it started to surge last week after the weaker-than-expected July jobs report reignited fears of a recession.
The Labor Department reported the economy added just 114,000 workers last month, while the unemployment rate jumped to 4.3%, the highest level since October 2021. The report added to mounting evidence that the economy is weakening in the face of high interest rates.
That’s because the rise in unemployment triggered the so-called Sahm Rule, an indicator that is used to provide an early recession signal. The rule stipulates that a recession is likely when the three-month moving average of the jobless rate is at least a half-percentage point higher than the 12-month low.