Tuesday, June 8, 2010

US shares fall on weak jobs data Page last updated at 21:01 GMT, Friday, 4 June 2010 22:01 UK E-mail this to a friend











DOW JONES INDUSTRIAL AVERAGE


Last updated: 08 Jun 2010, 16:19 UK



Dow Jones intraday chart



*Chart shows local time

















value change %
9801.46 -15.03 -0.15

















US shares have seen big falls after it emerged that fewer jobs were created last month than expected.



The Dow Jones index shed 324 points or 3.16% in Friday trading, with the S&P 500 and Nasdaq indexes also seeing falls of more than 3%.



Some 431,000 jobs were created in May, the Labor Department said. However, analysts had expected 500,000 new jobs.



Adding to the bl eak outlook, most of the new jobs - about 411,000 - were temporary posts for 2010 Census staff.



At the same time, the jobless rate fell to 9.7% in May, from 9.9% in April. Analysts said the decline was partly caused by 322,000 people leaving the workforce for a variety of reasons.



The fall in the value of the Dow was its second-worst one-day decline so far this year. It was also the second time in two weeks that it closed below the 10,000 level.



Stock markets in Europe also extended losses soon after the data was released.



The FTSE 100 in London closed 1.6% lower and France's Cac 40 index dropped 2.9%, while the Dax index in Germany fell 1.9%.



Despite the market reaction, President Barack Obama said the jobs report showed the economy was getting "stronger by the day".



"We've now added jobs [in] s ix out of the last seven months. The question now is, how do we keep this momentum going?" he said.



'Supportive' policies

In total, there were 15 million people out of work in the US in May.



The number of long-term unemployed - those who have been out of work for 27 weeks or more - was unchanged from April at 6.8 million.



The private sector showed weak job growth, with only 41,000 jobs created. These came largely from manufacturing, temporary help services and mining, while the construction sector saw job losses.



"The private sector needs much more supportive government policies to accelerate the economic recovery and jobs creation," commented Peter Morici, professor at the Smith School of Business, University of Maryland.





The monthly jobs report is one of the most closely watched economic indicators in the US.



High unemployment remains one of the biggest obstacles to strong, sustained growth.



President Obama has said that creating jobs is his number one focus.



On the currency markets, the euro fell to a new four-year low against the dollar after comments from French Prime Minister Francois Fillon suggested the single currency's weakness was "good news".



The euro fell 1.4% to $1.19920, marking the first time it had fallen below $1.20 since March 2006.



Non-eurozone EU member Hungary saw its currency, the forint, fall by 5.6% against the euro, amid growing fears that the country could be facing a Greek-style debt crisis.





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