US shares have fallen
after official data showed firms had created only 80,000 new jobs in
June, leaving the jobless rate unchanged at 8.2%.
Job creation remains below the 100,000 judged necessary by the Federal Reserve for a stable job market, according to the US Labor Department.Shares slipped after the news, with the opening Dow Jones index falling 1%.
President Barack Obama said the rise in employment was "a step in the right direction".
Campaigning in the swing state of Ohio on Friday, President Obama acknowledged that "it's still tough out there" for ordinary Americans.
'Kick in gut' Republican White House candidate Mitt Romney said from Wolfeboro, New Hampshire, that the jobs data underlined the need for a new president, adding "this kick in the gut has got to end".
Analysis
People are talking a lot about the weather here, as eastern states swelter under triple-digit temperatures. And today's job figures might make President Obama's collar feel stickier still.America has now seen four months of lacklustre job gains and there are just four more monthly job reports to go before the country votes. No president since World War II has won re-election with unemployment at more than 7.4%. Today it stubbornly stands at 8.2%, unchanged from May.
And yet a new survey has found economic optimism on the rise. The CNN/ORC International poll suggests 60% of Americans believe the economy will be doing well by 2013, up from just 39% last October.
And confidence is key. Without it, banks won't lend, firms won't hire and consumers won't spend. But is it confidence that an Obama second term will bring big economic gains? Or that President Romney will bring a new approach?
Sluggish jobs and income growth
will do little to restore Americans' sense of economic wellbeing in the
run-up to Presidential elections in November.
A better-than-expected private sector jobs report on Thursday
had raised investors' hopes for a stronger pick-up in the labour
market.However, there was some more positive news, with May's figure of 69,000 new jobs was revised upwards to 77,000.
Still, the relatively low number of jobs being created in the economy is not sufficient to offset the rise in the US population and workforce.
European stock markets also fell in response to the weak growth. Germany's Dax index and the French Cac 40 both declined by more than 1% following the announcement, while in London, the FTSE 100 was down more than 0.4%.
Most of the US jobs growth was in professional and business services, with the Labor Department saying that employment in other major industries was little changed over the month.
Cary Leahey, economist and managing director at Decision Economics in New York, said the low number could raise hopes that the Federal Reserve would do more to help the economy through further quantitative easing (QE): "It's a weak report at first blush, but it doesn't look as if the tone is any different from the last couple of months.
Market Data
Last Updated at 04:58 GMT
| Dow Jones | 12772.47 | Down | -124.20 | -0.96% |
| Nasdaq | 2937.33 | Down | -38.79 | -1.30% |
| FTSE 100 | 5662.63 | Down | -30.00 | -0.53% |
| Dax | 6410.11 | Down | -154.69 | -2.36% |
| Cac 40 | 3168.79 | Down | -60.57 | -1.88% |
| BBC Global 30 | 6209.49 | Down | -44.39 | -0.71% |
"There's no meaningful difference
between growth of 75,000 jobs and growth of 80,000 jobs. The market will
see this as increasing the possibility that QE3 is coming."
The number of long-term unemployed was unchanged at 5.4 million, with this category making up 41.9% of the unemployed.The number of people employed for fewer hours than they would be willing to work because of a scarcity of full-time employment was also unchanged at 8.2 million.
The category known as "marginally attached" to the workforce, meaning they have not looked for a job in the previous four weeks although they were classed as available for work, fell from 2.7 million to 2.5 million.
No comments:
Post a Comment