US jobs growth lower; builds pressure on Fed to act

Business

oi-Sunil

By Sunil Fernandes

Published: Saturday, September 8, 2012, 9:57 [IST]

US jobs growth came in worse than expectations for the month of August, increasing speculation that the Federal Reserve may pump additional money into the sluggish economy when its 2-day meeting ends on Thursday.

Non-farm payrolls increased only 96,000 last month, the Labor Department said on Friday. Markets were expecting an increase of at least 120,000. The unemployment rate dropped to 8.1% from 8.3% in July.

The disappointing data adds pressure on Ben Bernanke to resort to quantitative easing as early as next week, as against expectations that it could happen sometime in December.

The poor data now adds to pressure on US President Obama ahead of the November elections in the US.

The Dow ended the day marginally higher despite the poor labour data, as expectations were built around the Federal Reserve resorting to QE3 measures.
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