US stocks sell-off re­sumes as poor jobs mar­ket data adds to anx­i­ety

The Guardian - - FINANCIAL - Do­minic Rushe Richard Partington

Wall Street re­sumed its sell-off yesterday af­ter dis­ap­point­ing fig­ures from the US jobs mar­ket sug­gested that the world’s big­gest econ­omy is run­ning out of steam.

Adding to con­cerns rat­tling stock mar­kets over Don­ald Trump’s trade dis­pute with China, the US La­bor Depart­ment said that the US econ­omy added 155,000 new jobs in Novem­ber, well be­low last month’s fig­ures and economists’ fore­casts.

The Dow Jones in­dus­trial av­er­age of lead­ing US com­pa­nies shed al­most 400 points in morn­ing trad­ing in New York, as the fig­ures prompted con­cern among in­vestors that slower eco­nomic growth could lie ahead.

Al­though the FTSE 100 closed up 74 points in Lon­don at 6,778, it had been more than 70 points higher still ear­lier in the day be­fore giv­ing up some of the gains. The lead­ing in­dex of UK shares had dropped by more than 200 points on Thurs­day in the big­gest daily de­cline since the Brexit vote.

Philip Shaw, chief economist at the bank­ing group In­vestec, said: “It demon­strates the skit­tish­ness of fi­nan­cial mar­kets at the mo­ment. Sen­ti­ment can shift around very quickly and there was al­ready a neg­a­tive vibe.”

Novem­ber was the 98th con­sec­u­tive month of growth in hir­ing in the US, the long­est streak of jobs growth since records be­gan. But the pace of hir­ing slowed dra­mat­i­cally last month. The US added 250,000 jobs in Oc­to­ber and economists had ex­pected 198,000 new jobs to be added this month.

The un­em­ploy­ment rate re­mained at 3.7%, a low un­seen since 1969, but some mar­ket watch­ers be­lieve the re­cov­ery is run­ning out of steam.

The news came af­ter ADP, the US’s largest pay­roll sup­plier, said that jobs growth had prob­a­bly peaked. Ac­cord­ing to ADP the pri­vate sec­tor added 179,000 jobs in Oc­to­ber, well be­low the 225,000 added in Septem­ber and lower than economists had fore­cast.

“Job growth is strong, but has likely peaked,” said Mark Zandi, chief economist at Moody’s An­a­lyt­ics, which pro­duces the fig­ures with ADP. “With very tight labour mar­kets, and record un­filled po­si­tions, busi­nesses will have an in­creas­ingly tough time adding to pay­rolls.”

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