Job growth stalls, fuels recession fears

Sep 2, 2011
By Lucia Mutikani | Reuters
Source: Yahoo News

WASHINGTON (Reuters) - U.S. employment growth ground to a halt in August, reviving recession fears and piling pressure on both President Barack Obama and the Federal Reserve to provide more stimulus to aid the frail economy.

For the first time in nearly a year the economy failed to create new jobs on a net basis according to the Labor Department's monthly nonfarm payrolls survey on Friday.

Economists had expected nonfarm employment to rise 75,000 last month but they cautioned against viewing the data as a surefire sign of recession.

A worsening debt crisis in Europe and an acrimonious political fight over the U.S. government budget and debt, which led Standard & Poor's to strip the country of its AAA credit rating, ignited a massive stock market sell-off last month and sent business and consumer confidence tumbling.

"The economy is struggling against stiff headwinds, which appear to have intensified in recent months," said Millan Mulraine, senior macro strategist at TD Securities in New York. "While it has clearly not fallen off the cliff, there is little to suggest it is anywhere close to regaining its momentum."

Investors fled riskier assets on the news, sending stocks tumbling, pushing up the price of gold, and lowering U.S. Treasury bond yields.

Employment was dampened by 45,000 striking workers at Verizon Communications. Those workers have since returned to work and will be counted as on the payroll in September.

But even taking that into account the report was largely bleak. The unemployment rate, however, held at 9.1 percent as a survey of households found both job growth and, for the first time in a year, an expanding labor force.

With the jobless rate stuck above 9.0 percent and confidence collapsing, President Barack Obama faces 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.

US shed 36,000 jobs in February

Fri, 05 Mar 2010 19:05:28 GMT

The US Job market has seen 36,000 jobs lost in February, a sign indicative of apparently no recovery despite efforts made to gradually bring the ailing economy back on track.

However, the figure released on Friday by US Labor Department fell well short of the 67,000 estimated earlier for the month.

Analysts have warned that the low claims count might be due to severe weather conditions in northeastern states.

The unemployment rate currently stands at close to 10-percent with almost 15 million Americans collecting benefits.

"Even though it's better than expected, it's more than we should tolerate," US President Barack Obama said following the report, according to AFP.

"Far too many Americans remain out of work, far too many families are still struggling in these difficult economic times," he said.

Obama promised to do more to promote job creation.

"That's why I'm not going to rest and my administration is not going to rest in our efforts to help people who are looking to find a job to help business owners who want to expand, feel comfortable, hiring again," he said.

On Thursday, House of Representatives passed a USD 15 billion measure to help reduce unemployment, after a similar move by the Senate.