Stock markets on both sides of the Atlantic tumbled on Thursday as investors took fright at a bigger-than-expected fall in US jobs last month that dashed hopes the recession was all but over in the world’s biggest economy.

The data showed that the number of people in employment fell 467,000 in June and the unemployment rate rose from 9.4 per cent to 9.5 per cent, its highest for 26 years.

Barack Obama, the president, called the jobs data “sobering”, but expressed confidence that the US would see recovery in the short term.

The official figures sent shares in the US and Europe and commodity prices sharply lower, with investors increasingly doubtful that so-called economic “green shoots” heralded a swift recovery from the worst recession in decades.

In New York, the S&P 500 index was trading 2.9 per cent lower at the close, while the FTSE Eurofirst 300 fell 2.6 per cent and FTSE 100 closed down 2.5 per cent. The yield on short-term US government debt fell, suggesting the market believed the prospect of an early rise in interest rates had diminished.

Source/Full Story: FT.com

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