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US jobs growth slowed sharply last month, setting the stage for the Federal Reserve to pump additional money into the sluggish economy next week and dealing a blow to President Barack Obama as he seeks re-election in November.
Non-farm payrolls increased only 96,000 in August, the Labour Department said yesterday. While the unemployment rate dropped to 8.1pc from 8.3pc in July, that was because so many Americans gave up the hunt for work.
The survey of households from which the jobless rate is derived showed a drop in employment.
The lacklustre report keeps the pressure on Mr Obama ahead of the November vote in which the health of the economy looms large.
"This weak employment report, in jobs, wages, hours worked and participation is probably the last piece the Fed needs before launching another round of quantitative easing next week," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey.
US stocks rose in early trading. The dollar extended its losses versus the euro.
Grave
Fed chairman Ben Bernanke last week said the labour market's stagnation was a "grave concern", a comment that raised expectations for a further easing of monetary policy as soon as the central bank's meeting on Wednesday and Thursday.
The economy has experienced three years of growth since the 2007-09 recession, but the expansion has been grudging and the jobless rate has held above 8pc for more than three years -- the longest stretch since the Great Depression.
The lack of headway putting Americans back to work has also put the question of further monetary stimulus on the table at the Fed. The central bank has held interest rates close to zero for nearly four years and pumped about $2.3trn (€1.8trn) into the economy through bond buying. (Bloomberg)
Irish Independent
