Optimists can easily chalk up Friday's disastrous day on Wall Street to a skittish market overreacting to lousy news about oil prices and unemployment. The problem, writes Ben Steverman in BusinessWeek, is that many analysts are lining up in the pessimists' camp, which holds that something more "fundamental" is awry. The credit crunch is easing, but rising inflation and an increasingly "fragile" economy could spell long-term trouble.
"It's pretty hard evidence that this is a recessionary environment, albeit pretty mild," said one economist in regard to the news that unemployment rose by 0.5%, the biggest monthly jump in more than 20 years. It's possible all this will blow over, writes Silverman, but the growing consensus seems to be that "the stock market is catching on to a new, scary reality."