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Dismal jobs data shakes world markets
CHRISTOPHER LEONARD
(The Associated Press)



08:08:53AM (DST) Monday,September 5,2011.

WASHINGTON (AP) — The dismal U.S. job market, which has intensified fears of another recession, may be even worse than the unemployment numbers suggest.

The shockwaves from the Labor Department report on Friday that employers stopped hiring in August have rippled around the world, sparking a steep retreat in Asian stock markets. The lack of hiring in the U.S. last month surprised investors — economists were expecting 93,000 jobs to be added. Previously reported hiring figures for June and July were revised lower.

The jobs picture may even be worse than the 9.1 percent unemployment rate suggests, because America's 14 million unemployed must also compete with 8.8 million other people not counted as unemployed — part-timers who want full-time work.

When consumer demand picks up, companies will likely boost the hours of their part-timers before they add jobs, economists say. It means they have room to expand without hiring.

Fears that the U.S. economy may be stuck in neutral, or worse, slammed Asian stocks and European shares sharply declined in early trading. Britain's FTSE 100 dropped 1.6 percent to 5,206.56. Germany's DAX fell 2.7 percent to 5,391.24 and France's CAC-40 toppled 2.4 percent to 3,074.47. Markets in the U.S. are closed for the Labor Day holiday.

Earlier in Asia, Japan's Nikkei 225 stock average sank 1.9 percent to close at 8,784.46 with sentiment also undermined by the persistent strength of the yen, which hurts exporters. Australia's S&P/ASX 200 fell 2.4 percent to 4,141.9 and South Korea's Kospi slid 4.4 percent to 1,785.83.

"The problem is that there simply hasn't been any meaningful jobs growth, which is precisely why markets are so worried about slipping back into recession," said Ben Potter of IG Markets in Melbourne, Australia.

"The authorities have thrown a lot of stimulus at the problem and to date, it's basically done nothing," Potter said. Markets are realizing "that there probably isn't a lot more authorities can do."

The unemployed will face another source of competition once the economy improves: Roughly 2.6 million people who aren't counted as unemployed because they've stopped looking for work. Once they start looking again, they'll be classified as unemployed. And the unemployment rate could rise.

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