Friday, June 3, 2011

US jobs figures cast fresh fears about global recovery

Fears rose for the strength of the global recovery, after jobs figures from the US capped off a week of alarming data.

The unemployment rate in the world's biggest economy climbed 0.1pc to 9.1 pc in May, while the number of jobs showed its smallest rise in eight months. Just 54,000 were added to payrolls for non-agricultural work - some 100,000 fewer than forecast.

The Dow Jones, the US benchmark share index, fell more than 140 points to just over 12,100 at one point as Wall Street digested the latest disappointment, while the dollar hit a record low against the Swiss franc, seen as a "safe haven" currency. However, the Dow recovered in late trading to 12,205.19 , down 43.36.

Investors had already seen a leading US manufacturing survey this week fall to its lowest level since September 2009 and a second credit rating agency threaten to put the country on review for a possible downgrade of its rating, unless politicians agree to raise its legal debt limit.

"The greater surprise is not the US slowdown was unexpected, but rather that it was so pervasive - reflected in housing, labour, manufacturing and consumer spending data," said Michael Woolfolk, managing director at BNY Mellon Global Markets.

Analysts have blamed the softness in the US economy on high energy prices, supply chain disruptions following the Japanese earthquake and tornadoes and flooding in some states. (read more)