Mohamed A. El-Erian: Investors Brace For Global Slowdown

united states currency seal - IMG_7366_web (Photo credit: kevindean)

May's disheartening jobs report underscores America's persistent unemployment crisis, and Europe is stumbling from bad to worse. The risk of a synchronized global slowdown requires a coordinated global response. The insufficient job creation, stagnant earnings and alarming long-term unemployment highlighted by May's disheartening jobs report underscore America's persistent unemployment crisis. The numbers also speak to a synchronized slowdown that is now taking hold of the global economy -- a phenomenon that is being signaled by virtually every other data release out of Europe, the U.S. and emerging countries.

The realization of lower global growth, together with increasing financial instability in some parts of the world (particularly Europe), is an important driver of the recent sharp selloff in equities and other risk assets. It has also turbocharged the collapse in yields on higher quality government bonds, with the 10-year U.S. bond at a record close of 1.46 percent on Friday (and Germany even lower)... Continue to read.

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