Poor July figures hit US job markets

The latest government figures released on Friday belied earlier hopes of a job spurt, triggered by expectations of a gain of 243,000 net jobs.

Employment in June, too, was weaker than previously reported, the US Labour Department said, with net jobs up just 78,000 – far lower than the modest 112,000 initially estimated.

Stung by the figures, stunned investors sent the Dow Jones industrial average plummeting 147.70 points, or 1.48%, to finish at 9815.33 – the lowest close since November 2003.

Blow to Bush

The jobs news could be a blow to President George Bush’s re-election hopes in November.

“Our economy has been through a lot,” Bush said in a campaign speech in New Hampshire.

“I am running because I understand how to take a strong economy to make it stronger. I say we have a strong economy, and it’s getting stronger,” he said.

But his Democratic challenger John Kerry pounced on the report to accuse Bush of mismanagement.

“The president keeps saying we have turned the corner. But unfortunately today’s job numbers further demonstrate that our economy may be taking a U-turn instead,” Kerry said in a statement.

Stuck economy

Sluggish job growth also cast doubt over the Federal Reserve’s determination to keep pushing up interest rates at a measured pace, with a quarter-point rise anticipated next week.

“It is very disappointing, it indicates that the economy is stuck in a soft patch for a much longer period than we anticipated,” said Wells Fargo bank chief economist Sung Won Sohn.

One bright note that emerged from the labour market report was that the unemployment rate, measured by a separate Labour Department survey of households, dipped to 5.5% in July from 5.6% in June.