WASHINGTON, Sept 9 (AFP): The US economic outlook has suddenly darkened in the wake of data showing a stalling of the job growth machine, raising risks that a housing slump will lead to a full-blown recession, analysts say.
Friday's data showing the first contraction in employment in four years, a loss of 4,000 US payroll jobs in August, stunned even the bearish analysts on Wall Street and flew in the face of most forecasts for slow but steady growth.
"People had been saying that as long as employment holds up, the consumer will be OK," and the economy will keep growing, said Nigel Gault, an economist at Global Insight.
"Now that job growth has stopped, we have to question that," he said.
The report on nonfarm payrolls, seen as one of the best barometers of economic momentum, was all the more of a shock because it included downward revisions for June and July, subtracting 81,000 jobs from earlier estimates.
Marc Chandler, analyst at Brown Brothers Harriman, said the report "is simply horrific and fans the most pessimistic fears (that) the housing market woes will undermine the US consumer, push the US economy into recession and drag down growth in much of the rest of the world."
Storm clouds gather for US economy as job growth stalls
FE Team | Published: September 10, 2007 00:00:00 | Updated: February 01, 2018 00:00:00
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