US jobs data causes stock markets to fall

Published:  9 Jul at 12 PM

Unimpressive jobs data in the US has caused shares to slip. Figures for June showed that 80,000 new jobs had been created which was 20,000 short of the figure required by the Federal Reserve to announce that the job market is stable. The Dow Jones fell 1 per cent on the report.

Although President Barack Obama said the jobs figures were moving in the right direction he admitted that the climate was still tough for the average American. Mitt Romney, the Republican presidential hopeful, said that the job numbers proved that it was time for a new leader.

A report last Thursday on jobs in the private sector, which was better than expected, raised investors’ hopes that the labour market was beginning to pick up. The figures for May were also revised to 77,000 from 69,000. However, the numbers are not high enough to offset a rise in the US workforce and population.

Any growth in the job market appears to be in business and professional services. The Labor Department said that employment in other industries remained relatively unchanged. The weak growth also had a negative effect on other stock markets around the world. The FTSE 100 in London dropped 0.4 per cent. In France the Cac 40 was down by more than a per cent as was the Dax index in Germany.

The latest figures have caused many analysts to believe that the US Federal Reserve may be close to announcing further quantitative easing measures in an effort to kick-start the economy.