A jobs report released Friday morning showed weaker than anticipated new jobs and pushed the three major stock indexes in the U.S. down by over 1% each. The jobs report released by the Labor Department showed a net increase in jobs of 80,000 for June. That was well below what economists and investors had expected and pointed to deceleration in the employment sector and a slowdown overall in the economy.
People are concerned, said one economist, who said it was difficult to imagine the economy recovering if there are no any jobs for people to earn money. The Dow dropped by over 154 points after the jobs report was released, while the S&P 500 was off 15 and the Nasdaq fell more than 42 points.
Investors’ concerns increased over the technology sector after Informatica and Seagate Technology reported quarterly results weaker than were expected. Informatica shares dropped close to 30%. Steep losses were also taken by other technology companies with Autodesk, Citrix and Teradata all well off their opening numbers.
Following a number of consecutive weak job reports and no change in the unemployment rate of 8.2%, the report on Friday will help fuel arguments for additional stimulus intervention from the Fed.
However, investors fear the jobs report was not weak enough to cause the Fed to take action when it has a governor’s meeting in late July. Governments around the globe are becoming more and more dependent on intervention taken by their central banks, as the global economic crisis continues to hit hard.