A US jobs fair in Los Angeles. No new jobs were created in the US in August
No new jobs were added to the US workforce in August, fuelling
fears that the world's largest economy is heading back into recession.
Analysts expected at least 75,000 new jobs to have been created in the US last month, but the figure came in at zero, sparking further falls on stock markets around the world. The FTSE 100, down around 85 points ahead of the figures, tumbled almost 140 points, to 5278, down more than 2.5%. The Dow Jones opened more than 200 points lower at 11,290, a drop of 1.75%.
Gold and German bonds, considered safe havens among increasingly nervous investors, made strong gains after figures showed US jobs growth ground to a halt in August. Gold jumped by 3%, to $1876 an ounce.
The US economy needs to add around 150,000 to 200,000 new jobs each month to bring the jobless rate down. It remained at 9.1% last month.
The US labour department said it was the weakest reading since last September, with firms holding off hiring after recent declines in consumer and business confidence.
President Obama, due to deliver a speech on employment next Thursday, is expected to come under further pressure to stimulate the economy, which has retrenched since the end of last year when growth averaged above 3%.
Figures for the second quarter revealed a sharp slowdown to 1% growth.
A strike by Verizon workers distorted the August figures, which showed a 48,000 decline in the number of workers in the information services sector, but that was offset by a downward revision of 58,000 to figures for July and June.
Rob Carnell, chief international economist at ING, said the figures would provide further ammunition for those arguing for further policy easing.
The Federal Reserve is due to discuss the possible reintroduction of quantitative easing at its next meeting later this month.
Carnell said it would be difficult to boost consumer demand while the figures showed real wage growth stalling.
"If there are any glimmers of hope in this survey, and basically there aren't, you could point to the smaller decline in the government sector as a potential slowing of public sector job shedding. You could also assume that this will have bolstered the chances of a new round of quantitative easing from the Fed before the year end," he said.
Analysts expected at least 75,000 new jobs to have been created in the US last month, but the figure came in at zero, sparking further falls on stock markets around the world. The FTSE 100, down around 85 points ahead of the figures, tumbled almost 140 points, to 5278, down more than 2.5%. The Dow Jones opened more than 200 points lower at 11,290, a drop of 1.75%.
Gold and German bonds, considered safe havens among increasingly nervous investors, made strong gains after figures showed US jobs growth ground to a halt in August. Gold jumped by 3%, to $1876 an ounce.
The US economy needs to add around 150,000 to 200,000 new jobs each month to bring the jobless rate down. It remained at 9.1% last month.
The US labour department said it was the weakest reading since last September, with firms holding off hiring after recent declines in consumer and business confidence.
President Obama, due to deliver a speech on employment next Thursday, is expected to come under further pressure to stimulate the economy, which has retrenched since the end of last year when growth averaged above 3%.
Figures for the second quarter revealed a sharp slowdown to 1% growth.
A strike by Verizon workers distorted the August figures, which showed a 48,000 decline in the number of workers in the information services sector, but that was offset by a downward revision of 58,000 to figures for July and June.
Rob Carnell, chief international economist at ING, said the figures would provide further ammunition for those arguing for further policy easing.
The Federal Reserve is due to discuss the possible reintroduction of quantitative easing at its next meeting later this month.
Carnell said it would be difficult to boost consumer demand while the figures showed real wage growth stalling.
"If there are any glimmers of hope in this survey, and basically there aren't, you could point to the smaller decline in the government sector as a potential slowing of public sector job shedding. You could also assume that this will have bolstered the chances of a new round of quantitative easing from the Fed before the year end," he said.
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