US unemployment rate holds steady at 9.1%

| September 2, 2011 | 0 Comments

According to the Labor Department, the world’s largest economy added no new jobs last month, which was a surprise after markets had expected 70,000 new jobs.

This represented the first time since 1945 that there has been a zero payrolls figure after 17,000 jobs were added in the private sector last month but these were cancelled out by 17,000 jobs lost in the public sector.

However, the latest figure means the unemployment rate remained unchanged at 9.1%.

Meanwhile, figures for the previous two months were revised downwards to show weaker jobs growth.

The Labor Department said 85,000 jobs were created in July, down from an earlier estimate of 117,000, while the number of jobs added in June was revised down to 20,000 from 46,000.

The news sent stockmarkets lower with the Dow Jones Industrial Average in New York down 2%, while stocks in Europe were lower, already adding to earlier losses.

Meanwhile, the Standard & Poor’s 500 Index was down 20.81 points, while the Nasdaq Composite Index lost almost 40 points.

The figures come after the Obama administration said it does not envisage the US re-entering recession and is predicting growth of 1.7% this year – albeit 1% less than its forecast earlier this year.

Official data from the Commerce Department show the economy grew by just 0.4% in the first quarter and 1% in the second.

Consumer spending has been weak over recent months and this is an area which is closely monitored as it accounts for approximately 70% of total economic output.

The economy continues to struggle in the face of higher unemployment and a depressed housing market.

Continued high unemployment could threaten President Barack Obama’s prospects for re-election next year.

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