U.S. job growth stumbles, raising doubts on economy
By Jason Lange
WASHINGTON (Reuters) - U.S. employers slammed the brakes on hiring over the last two months, raising new doubts the economy is strong enough for the Federal Reserve to raise interest rates by the end of this year.
Payrolls outside of farming rose by 142,000 last month and August figures were revised sharply lower to show only 136,000 jobs added that month, the Labor Department said on Friday.
That marked the smallest two-month gain in employment in over a year and could fuel fears that the China-led global economic slowdown is sapping America's strength.
"You can’t throw lipstick on this pig of a report," said Brian Jacobsen, a portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
The weak job growth took Wall Street by surprise and U.S. stocks sold off while the dollar also weakened and yields for government bonds fell.
Bets on interest rate futures showed investors only saw a 30 percent chance of a Fed rate hike in December, down from just under 50 percent before the job report's release.
"(With) a weak report here, in combination with some of the other weakness that we are seeing across the globe, the odds get dinged for December," said Tom Porcelli, an economist at RBC Capital Markets.
Investors saw virtually no chance the Fed would end its near-zero interest rate policy at its only other scheduled meeting this year, to be held later in October. Futures prices indicated investors were betting the Fed would probably hike in March. Continued...