Markets crater Monday morning after last week’s jobs report

Asian markets crashed on Monday as traders in Japan and South Korea began selling off stocks in preparation for a possible economic recession in the United States. Japan’s Nikkei 225 plunged 12.4 percent—its worst day since 1987, according to the Associated Press. U.S. markets just hours later opened with a similarly dire performance. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all plummeted during Monday’s morning hours.

What did the jobs report have to do with all this? The Bureau of Labor Statistics reported Friday that the unemployment rate had risen for the fourth month in a row. It also reported that employers hired fewer workers in July than in previous months. In May, employers hired roughly 270,000 workers. In June they hired only about 200,000. And in July, they hired only about 114,000.

On Wednesday, the Federal Reserve declined to lower its interest rates, which have perched at around 5.25-5.5 percent for more than a year. The Fed posted them there in a bid to lower inflation to its goal of 2 percent. It currently sits at around 2.5 percent, according to Federal Reserve Chairman Jerome Powell. The Fed insisted that the economy was expanding at a solid pace despite the job market slowdown and the rising unemployment rate. Recent economic indicators, however, had given the central bank confidence that it could relax interest rates in the near future, Powell said.

Dig deeper: Listen to Nick Eicher’s Monday Moneybeat discussion with David Bahnsen comparing the economic visions of former President Donald Trump and Vice President Kamala Harris.