BUSINESS NEWS FEBRUARY 11TH, 2016
INDEXES DOWN 10 PERCENT
In a continuation of the worst beginning of the year for Wall Street, the Dow Jones and S&P 500 indexes recorded a drop of nearly 10%, the result of investors selling off stocks in bulk. Among fears that the global economy is tanking, along with Federal Reserve president Janet Yellen’s prediction that the United States economy will suffer, these drops look ominous in the face of the new fiscal year. In a statement Thursday, President Yellen said the Fed will be looking to follow Japan’s example in implementing negative interest rates, in an effort to strengthen the global economy.
LABOR MARKET LOOKING STRONGER THAN EVER
Despite fears that the United States economy is weak, the labor market looks to be on strong footing as the number of people claiming unemployment benefits showed to be much less than predicted last week. Recently, the White House declared an unemployment rate of 4.9%, the lowest unemployment has been in eight years. Last week’s predictions had 281,000 people filing for unemployment. The actual numbers showed only 269,000. Chris Rupskey, chief economist at the MUFG Union Bank in New York, said that even though the global market is looking weak, the United States labor market looks to be stronger than ever.
TWITTER HITS ALL TIME LOW
Twitter stock dropped to just 13.91 a share on Thursday, the lowest they have ever been. Experts forecast Twitter’s intrinsic value at just $11.40 a share, implying that the stocks have further to fall. Twitter officials have attributed the drop in share price to a stall in user growth. Under new CEO Jack Dorsey, Twitter has been experimenting with ways to make the website more engaging, without tangible results. Twitter’s fall is just another indication of the turmoil surrounding the United States economy.
THE COST OF RUBIO’S TAX PLAN
Florida Senator Marco Rubio faced troubles before and after the New Hampshire primary, falling to fifth in the polls. However, his policies still merit a look. Should he be elected, Rubio plans to give tax cuts to everyone, especially the wealthiest. A report came in Thursday from the Tax Policy Center saying that enacting across the board tax cuts could add as much as $8.2 trillion to the national debt. His plan would implement a “progressive consumption tax”, where wage income would still be taxed, but investment and individual savings would be spared. Lee Burman, director of the Tax Policy Center, said this would be a “radical and innovative plan” if the numbers add up.