USA / FILE: Wall Street stocks tumble after data shows U.S. jobs growth grinding to a halt in August

Record ID: 186947

  • Title: USA / FILE: Wall Street stocks tumble after data shows U.S. jobs growth grinding to a halt in August
  • Date: 3rd September 2011
  • Summary: WASHINGTON D.C, UNITED STATES (SEPTEMBER 2, 2011) (REUTERS) (SOUNDBITE) (ENGLISH) GENE SPERLING, DIRECTOR OF THE WHITE HOUSE NATIONAL ECONOMIC COUNCIL, SAYING: "We have been working with him very closely for weeks to craft what we think will be a very meaningful package. It will be significant, it will have a significant impact on the economy. It will reflect his vision. But I also think people will see that in the areas he discusses, on tax cuts for workers and small businesses, strategies for the unemployed, jobs to rebuilding America, that these are the type of things that have been historically deserving of bipartisan support. And we're going to hope very much and he's going to urge the Congress very much to put partisanship and politics to the side and put the economy and workers to the front."
  • Embargoed: 18th September 2011 13:00
  • Keywords:
  • Location: Usa
  • Country: USA
  • Topics: Economy
  • Reuters ID: LVABPGVPKD511TA5NX7PD4B0JBP6
  • Story Text: Wall Street stocks tumbled at the open on Friday (September 2), with major indexes falling 2 percent after data showed U.S. jobs growth ground to a halt in August, adding to worries about the health of the economy.
    Nonfarm payrolls generated no new jobs last month as sagging consumer confidence discouraged already skittish U.S. businesses from hiring, keeping pressure on the U.S. Federal Reserve to provide more monetary stimulus to the economy.
    Net job creation in the month of August was zero. The number of jobs created in the private sector were offset by the number of jobs lost in the government sector. But even there, there's nothing to smile about. The private sector added only 17,000 jobs in August, a far cry from the 105,000 expected by economists. The only hopeful sign may be from the unemployment rate, which held steady at 9.1 percent for a second month in row.
    Other than that - there's very little good in this report, says James Bianco, president of Bianco Research in Chicago.
    "Even if you account for the Verizon strike, which was 48,000 workers and sort of added that back in, it's still not a good number, it paints an economy that is decelerating and it paints a job market that is continuing to slow dramatically over the summer," said Bianco.
    A slowdown that significantly increases the chances the U.S. is in, or heading back into, a recession, according to Bianco.
    "If you had to put a gun to my head and said are we in or not- I would say we are or we will be fairly shortly. The story in economics this year has been everybody is overestimated the strength of the economy," said Bianco.
    Stocks had gained ground recently on hopes that data reflecting a weak economy would prompt the Fed to introduce new stimulus. However, some say there is only so much the Fed could do.
    The Dow Jones industrial average was down 182.13 points, or 1.58 percent, at 11,311.44. The Standard & Poor's 500 Index was down 19.75 points, or 1.64 percent, at 1,184.67. The Nasdaq Composite Index was down 35.90 points, or 1.41 percent, at 2,510.14.
    Some economists caution against reading too much into August's numbers given the impact of the debt debate, a hurricane, and the European debt crisis.
    Investors, however, believe the chances of a recession have risen, sending stock markets in the U.S. and Europe sharply lower. And that puts pressure on Washington - where President Obama is expected to roll out a new jobs plan in a speech to the nation on Thursday (September 8). It will be closely listened to by more than the 14 million Americans out of work.
    On Friday, Gene Sperling, Director of the White House National Economic Council, told Reuters that Obama's job plan would provide "meaningful" tax relief and include a strategy for helping the nation's long-term unemployed.
    "We have been working with him very closely for weeks to craft what we think will be a very meaningful package. It will be significant, it will have a significant impact on the economy. It will reflect his (Obama's) vision. But I also think people will see that in the areas he discusses, on tax cuts for workers and small businesses, strategies for the unemployed, jobs to rebuilding America, that these are the type of things that have been historically deserving of bipartisan support," said Sperling.
    With the jobless rate stuck above 9 percent and confidence collapsing, President Obama faces a lot of pressure to come up with ways to spur job creation. The health of the labor market could determine whether he wins re-election next year.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register