White House economic adviser heads to Harris campaign as stock market plunges
US stocks tumbled Monday morning, continuing Friday's sell-off on fears of a recession
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A senior economic adviser is leaving the White House to join the Harris campaign as the stock market takes a historic tumble.
White House senior adviser Gene Sperling is leaving his administration position to work with Vice President Kamala Harris’ presidential election campaign, The Associated Press reported Monday.
Sperling will be a senior economic adviser to Harris’ policy team, the outlet reported.
"Under Gene’s leadership, the American Rescue Plan has delivered economic relief to cities and counties across the country, protected millions of union pensions, made the largest-ever federal investment in public safety, and kept thousands of small businesses afloat," President Biden said in a statement to The Associated Press.
STOCK SELLOFF CONTINUES, AS U.S. RECESSION FEARS MOUNT: LIVE UPDATES
Gene Sperling attends an event during the U.S. Conference of Mayors Winter Meeting, in the East Room of the White House on Jan. 19, 2024. (Drew Angerer / Getty Images)
FOX Business reached out to the White House and Harris campaign for comment.
The news came as trading began on Monday morning, with U.S. stocks tumbling, continuing Friday's sharp drop after a global sell-off whacked equities on fears of a U.S. recession.
A weak jobs report and shrinking manufacturing activity in the world's largest economy, coupled with dismal forecasts from the big technology firms, pushed the Nasdaq-100 and Nasdaq Composite into a correction last week.
The Dow Jones Industrial Average collapsed over 1,000 points before recovering some of those losses, following a 600-plus point drop Friday.
US STOCKS TUMBLE AS PART OF GLOBAL MARKET SELL-OFF
The Dow Jones Industrial Average collapsed over 1,000 points, before recovering some of those losses, following a 600-plus point drop Friday. (Silas Stein/picture alliance via / Getty Images)
"While Friday’s employment report was disappointing, it wasn’t the only worrisome economic indicator, only the latest," said Greg McBride, Bankrate's chief financial analyst. "Couple economic concerns with the cacophony of earnings disappointments and weak corporate outlooks, global unrest, and currency gyrations, and you have the recipe for sudden volatility."
The weak jobs data also triggered what is known as the "Sahm rule," seen by many as a historically accurate recession indicator.
"The July jobs report is being viewed as a recession warning, and the markets are responding accordingly," said Bill Adams, chief economist at the Dallas-based Comerica Bank.
With the jobless rate unexpectedly rising, the so-called Sahm rule is now in play. Named after former Federal Reserve economist Claudia Sahm, the rule has successfully predicted every recession since 1970.
THE JULY JOBS REPORT JUST TRIGGERED A RELIABLE RECESSION INDICATOR
Big Wall Street brokerages also revised their Fed rate projections for 2024 to show greater policy easing by the central bank. (Spencer Platt / Getty Images)
It stipulates that the economy is in the early stages of a recession when the three-month moving average of the jobless rate is at least a half-percentage point higher than the 12-month low. Over the past three months, the unemployment rate has averaged 4.13%, which is 0.63 percentage points higher than the 3.5% rate recorded in July 2023, crossing that threshold.
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Big Wall Street brokerages also revised their Fed rate projections for 2024 to show greater policy easing by the central bank.
Japanese stocks also fell on Monday, with the Nikkei 225 index closing lower by more than 12% – 4,451.28 points – in its worst day since 1987.