While candidates hot on the campaign trail may be talking about job creation and keeping industry alive, the latest job figures from the United States certainly do not paint a rosy picture nor have they had a salubrious effect on the markets, as US shares fell in reaction to the latest job data.
According to figures released last week by the US Department of Labour, the unemployment rate stood unchanged at 8.2 per cent despite the fact that official figures showed that 80,000 new jobs had been created. But this figure for new jobs remained below the target of 100,000 new jobs set by the Federal Reserve.
The publication of the these Department of Labor figures had corresponding effects on the US stock exchange as well, as the Dow Jones fell by 1 per cent and the Nasdaq by 1.3 per cent, in turn affecting global stock markets with the German Dax and French Cac 40 falling each by more than 1 per cent and the British FTSE 100 expediting a 0.4 per cent fall.
Reacting to the news, US Presidentsaid, while campaigning in Ohio, that "it's still tough out there" for ordinary Americans while presidential contender, republican said "this kick in the gut has got to end “while underscoring the need for a new man in the White House.
As to the data, the number of US unemployed remained steady at 12.7 million while joblessness among blacks rose slightly to 14.4 per cent but remained steady among adult men (7.8 per cent), adult women (7.4 per cent), teenagers (23.7 per cent), Hispanics (11.0 per cent) and whites (7.4 per cent). Among the unemployed, the predominance of the long term unemployed (more than 27 weeks without a job) was noted, accounting for 49.1 per cent of the unemployed at 5.4 million people.
But it was not all bad news as private sector jobs saw positive signs while the new job figures for May were revised from 69,000 to 77,000. The Labour department noted that the most job increases occurred in the professional and business services while other major industries did not note any changes.
Commenting on the new job figures, economist at Decision Economics, Cary Leahey said, "It's a weak report at first blush, but it doesn't look as if the tone is any different from the last couple of months. There's no meaningful difference between growth of 75,000 jobs and growth of 80,000 jobs. The market will see this as increasing the possibility that QE3 (qualitative easing) is coming."