A very nasty summer sell-off has been under way now in stock markets around the world for the last 48 hours – and nervous investors got another reason to carry on selling on Friday.
The US non-farm payroll figures – essentially a measure of how many jobs were added to the US economy last month and probably the single most-watched piece of economic data in financial markets – came in much lower than expected for July.
Some 114,000 jobs were created in the US economy during the month. That was significantly lower than the 175,000 jobs that Wall Street had expected to see created.
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It was the weakest figure since December last year and the second weakest since March 2020 – when the pandemic was just taking off in the West.
The June number was also revised lower from the previously healthy-looking 206,000 to 179,000. The figures, when taken alongside the number of people entering the workforce, mean that the unemployment rate in the US in July rose to 4.3%.
That again was worse than the 4.1% pencilled in by Wall Street. And they have intensified fears that the world’s biggest economy may be heading for a recession.
Those fears had already started to swirl when, on Wednesday evening, the US Federal Reserve declined to cut interest rates from the 5.25%-5.5% range at which they have been since July last year – only for some figures the following day pointing to a contraction in US manufacturing activity during July.
That had already put the skids under US equities even before the jobs data. All of the main US stock indices fell on Thursday – with the S&P 500, the most important index, falling by 2.5% and the Dow Jones Industrial Average declining by 1.9%. The tech-heavy Nasdaq slumped by 3.3% and the Russell 2000, the main index of smaller US companies, slid by 3%.
Those falls were added to on Friday afternoon – setting the S&P 500…
