On Friday evening, the Dow Jones Industrial Average closed with 2.5 percentage decline — 666 points, its steepest percentage downfall since June 2016, and greatest point collapse since the 2008 financial crisis, as CNN noted.
Friday’s Dow drop tells a different economic story than the Bureau of Labor Statistics’ jobs report that was also released Friday. That report showed that the economy added 200,000 jobs in January, and the unemployment rate was also reported to hold steady at 4.1 percent—the lowest since 2000. According to the report, average hourly wages were 2.9 percent higher than a year ago, too.
Yet, as CNN pointed out, the Dow is still just 3.9 percent below its record high of 26,616.71, which was achieved just last week on January 26.
Following the jobs report this morning, Donald Trump took to Twitter to boast about the thriving economy, and take credit for it, suggesting that it was a result of the tax cuts.
With 3.5 million Americans receiving bonuses or other benefits from their employers as a result of TAX CUTS, 2018 is off to great start!
✅Unemployment rate at 4.1%.
✅Average earnings up 2.9% in the last year.
✅200,000 new American jobs.
✅#MAGA🇺🇸 https://t.co/upqSvBhRqJ— Donald J. Trump (@realDonaldTrump) February 2, 2018
Trump boasted about the economy earlier this week during his State of the Union address.
“Small business confidence is at an all-time high. The stock market has smashed one record after another, gaining $8 trillion in value. That is great news for Americans’ 401k, retirement, pension, and college savings accounts,” Trump said.
The Dow’s fall today could signal early signs of a bubble bursting, though. Indeed, Alan Greenspan, former Federal Reserve chairman, told Bloomberg on Wednesday that the long-term outlook for the economy might not be great.
“There are two bubbles: We have a stock market bubble, and we have a bond market bubble,” he said. “We are dealing with a fiscally unstable long-term outlook in which inflation will take hold.”
In a separate interview, Greenspan called the tax plan a mistake.
“Economically, it’s a mistake to deal with sharp reductions in taxes now,” he said.
Meanwhile, some on Twitter are speculating the crash is a result of the GOP-Nunes memo, and others are wondering if Trump will take credit for this too.
Will #Trump blame today's 666 point drop in the #Dow on #Clinton or #Obama?
— EJ Dionne (@EJDionne) February 2, 2018
Dow drops 666 points and posts its worst week in over two years… you know @realDonaldTrump hates seeing this today and it’s 100% his fault when he decided to attack the credibility of the FBI this morning.
— Seph Lawless (@seph_lawless) February 2, 2018
Will #Trump take credit for this?: “Dow plummets 666 points, capping worst week in 2 years” https://t.co/obbTGDbz0d
— Maya Wiley (@mayawiley) February 2, 2018
