US markets fell over 2% in early trading today on the back of figures showing no jobs were created in August.
The non-farm payroll figures released today showed no new jobs were created, against a consensus expectation of about 75,000 new jobs. It is sharply down on July's figure when 117,000 jobs were added.
However, the unemployment rate held at 9.1% or 14 million.
According to the data from the US Bureau of Labor Statistics, hours worked and average earnings both fell, while the number of part time workers increased by 400,000.
Following the announcement, the major indices in the US plunged on opening, with the S&P 500 down 2.1% to 1,179 and the Dow falling 2.1% to 11,251.
European markets also fell further in afternoon trading in reaction, with the French Cac 40 down 2.6% or 83 points to 3,182, and the German Dax falling 2.8% or 161 points, to 5,569.
In the UK, the FTSE 100 was down 2.1% or 115 points to 5,304.
The dollar also slid 2.3% against the Swiss franc and 0.4% against the yen n the news.
Yields on ten-year treasuries fell from 2.13% to 2.05%, as investors fled into government bonds to protect against further falls in equity markets.
The labour market data follows a downward revision of the US’ economic outlook by the US Commerce Department last week, from 1.3% to 1% in the second quarter.
Earlier the White House also revised its growth forecast for 2011 from 2.7% to 1.7% but said the US will avoid slipping back into recession.
The latest statistics will increase pressure on Federal Reserve chief Ben Bernanke to consider further stimulus measures to prop up the ailing economy.
His speech at Jackson Hole last week gave little away in terms of a new quantitative easing plan, but the chairman said he would use the tools at his disposal “as appropriate” to support the recovery.
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