Stocks Fall As US Employment Growth Figures Stagnate
PRESS ASSOCIATION -- The worst US employment data for nearly a year has increased fears of a global recession and sparked another rout on stock markets.
The number of people employed in the world's biggest economy was flat in August, its worst performance since last September and worse than analysts had expected.
This caused jittery traders to dump stocks, sending the FTSE 100 Index in London down more than 2%, while the DAX in Germany and the CAC 40 in France shed more than 3%.
The gloomy figures heightened fears that the US will lead the world economy back into recession and have undone most of the gains notched up by the London market over the past week.
The sharp falls mark a return to the volatile trading patterns of last month when a raft of gloomy economic data from the US and eurozone created panic that the world would descend back into recession and created a bloodbath on world markets.
Markets dropped by as much as 15% but had been recovering over the past fortnight until the crisis of confidence.
Banks were among the biggest fallers, reversing Thursday's gains after reports the sector may escape major reform until after the next general election. Barclays and Lloyds were both down 5%.
Oil prices, which generally reflect confidence in the world economy, have also dropped after recent gains. Brent crude oil was down 2% at 111.8 US dollars a barrel.
The weak jobs data intensified calls for the US Federal Reserve to embark on a third round of quantitative easing, or money printing, to inject life into its ailing economy.
Max Johnson, a broker at Currency Solutions, said: "Disastrous data for the US, for the dollar and for economies around the world. US companies have no confidence in the US economy and no confidence in the country's political leadership, so it's no surprise no jobs are being created."