Good riddance third quarter — hope we never see the likes of you again.
Both Main Street and Wall Street took it on the chin in the period as major stock indexes posted their steepest quarterly decline in more than two years — while paychecks shrank 0.1 percent in August, the largest drop since October 2009.
The 14.3 percent drop in the S&P 500 in the quarter ended yesterday — the most severe decline since the 22.6 percent sell-off in the final quarter of 2008 — will hit home in the next few weeks as workers receive their 401(k) statements.
With many invested in S&P 500 funds, few are going to feel anything but poorer.
“Fear has receded, but there there’s a long way to go,” said economist Jonathan Basile at Credit Suisse Securities. The index for September, he added, “is now in line with the Great recession’s low. ”
Spending was flat in August, according to the Commerce Department yesterday, triggering more alarms that growth could grind to a halt altogether this year. Consumer spending makes up 70 percent of the economy.
Consumer sentiment in households with incomes over $75,000 gained a narrow fraction in a government sentiment index, but remained gloomier in lower-income homes.
Wall Street suffered its worst quarter since the final quarter of 2008 when global credit froze and the Standard & Poor’s 500 Index lost 22.6 percent of its value during the harrowing three months.
The Dow Jones industrial average also got clobbered in the third quarter with a 10.6 percent loss, its worst quarterly washout since the 13.3 setback in the first quarter of 2009.
“It seems very unlikely that consumers can lead the economy to a faster recovery pace. The consumer needs job growth,” said economist John Ryding at RDQ Economics.
The markets ended yesterday on a sour note. The Dow dropped 240.60 points, or 2.16 percent, to 10,913.38. The S&P fell 28.98 points, or 2.50 percent, to 1,131.42.