U.S. employment last month stagnated as business confidence plummeted falling under the weight of Washington's down-to-the-wire scrum over the debt ceiling, a major strike and Europe's ongoing inability to fix either its Greek sovereign debt crisis or deteriorating banking sector.
Economists were expecting employers to add between 70,000 and 90,000, a number that would have left the nation's unemployment rate at 9.1 percent -- but the nation's nonfarm payroll was flat. In July, at least, hiring had added 85,000 jobs.
Net employment flat-lined in August, Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, who forecast a decline of 5,000, told Bloomberg. When the outlook is uncertain, businesses don't hire. Calls that we're on the cusp of a recession or already there are not completely unwarranted.
Total nonfarm payroll employment for June was revised from a gain of 46,000 downward to a gain of 20,000, and the change for July was revised downward from a gain of 117,000 to a gain of of 85,000.
The Labor Department report confirmed a spate of downbeat data: On Wednesday a private report said the U.S. private sector created 91,000 jobs in August, also short of expectations; on Thursday data showed initial jobless claims were still at a lofty 409,000; and consumer confidence dropped last month to a two year low.
Expectations of continued weak hiring in the world's largest economy hammered stocks in Asia and Europe between 2 percent and 3 percent.