Economists warned of a triple disaster that is looming over the global economy following release over the weekend of jobs data in the U.S. and weak factory output in China. They identified the disaster as chaos in Europe, recession in the United States and slowdown of the Chinese economy.

The U.S. created only a dismal 69,000 new jobs in May while unemployment rate rose to 8.2 per cent which pointed to the country returning to another period of recession. From December through January, the average job creation was a healthy 252,000 a month.

Following the May jobs report, the Dow Jones industrial average tumbled down 275 points on Friday which was the Dow's largest loss since November. On Thursday, Washington said the country's economy expanded by a mere 1.9 per cent in the first quarter of 2012.

In China, the country's manufacturing weakened in the fifth month of 2012. The Chinese factory output was the weakest in three months, prompting analysts to forecast an 8 per cent economic growth for China in the second quarter of the year which is a slowdown from the 10.4 per cent growth registered in 2010 and 9.2 per cent in 2011.

However, economists said their biggest fear continue to be Europe as Greek voters are expected to reject in mid-June the terms of a $170-billion bailout that calls for large budget cuts, and lead to Athens abandoning the euro. Such a move is anticipated to cause economic and financial chaos in the continent as the Greek debt shifts from euro denomination to Greek drachmas which would have uncertain value.

The economists added that Europe is definitely headed for a financial disaster and is almost sure of going through another recession worse and longer than the 2008 global financial crisis.

Ahead of that scenario, the German stock market index tumbled down 3.4 per cent, the French market declined by more than 2 per cent and the British share market dipped over 1 per cent over the weekend.

These three threats had resulted in global money moving into perceived safe havens such as gold whose price returned to over $1,600 an ounce. At the same time, yield on the 10-year U.S. government bonds went down 1.56 per cent while the yield for 30-year bonds dropped to 2.64 percent. Yield on two-year German bunds tumbled down to zero and that for two-year Swiss bonds even turned negative.

For the week ending May 30, flows into EPFE Global-racked U.S. Money Market Funds grew to a 25-week high, while U.S. Bond Funds took in more than $1.5 billion for the 24th consecutive week. Gold Funds also recorded their biggest inflow since late January.

All these developments point to the Reserve Bank of Australia (RBA) likely cutting rates when it meets on Tuesday to 3.5 per cent. Westpac chief economist forecasts that the RBA would make more rate cuts in July, August and one more toward the end of the year until the overnight cash rate goes down to 2.75 per cent.

However, some economists doubted how effective interest rate cuts would be in boosting the Australian economy given than interest rates in the U.S. and Europe are already zero but the economies of these two continue to languish. The eurozone's unemployment rate is at 11 per cent, which is the highest rate since the currency was introduced in 1999, according to Eurostat.

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