Fears of a double-dip recession in the world’s biggest economy were heightened today when Washington announced that the US shed 85,000 jobs last month.
Dashing hopes that America was pulling smoothly out of its toughest postwar economic setback, the commerce department revealed that the expected pre-Christmas hiring spree had failed to materialise.
Wall Street had been expecting fresh evidence that low interest rates and higher government spending were bringing a halt to the job losses that have sent the US unemployment rate spiralling to 10% – its highest level since the early 1980s.
Revisions to November’s payroll data showed the first jobs growth – a 4,000 increase – in more than two years. But the dollar, shares and oil prices fell back when the December figures were published.
Since the start of the financial crisis in August 2007, the Federal Reserve had cut interest rates to barely above zero and created new electronic money in order to kickstart growth.
Related articles: