Disappointing U.S. jobs data push stock markets lower
Last Updated: Thursday, July 2, 2009 | 5:08 PM ET
CBC News
Stock markets in Toronto and New York fell Thursday as U.S. employment data showed employers cut 467,000 jobs in June, driving unemployment to a 26-year high of 9.5 per cent.
The figure was almost 29 per cent higher than the 363,000 job losses that economists had been forecasting.
The news helped push the TSX composite index down 129 points to close at 10,245. New York's Dow Jones lost 219 points, while the Nasdaq slid 49 points.
The jobless rate is expected to continue rising through 10 per cent, because unemployment lags the economy. The job losses also mean the recovery could be slower than hoped, some economists said.
ScotiaMcLeod adviser Andrew Pyle described the U.S. unemployment rate's slow climb to 10 per cent as "death by a thousand cuts," but said the data wasn't as bad as it could have been.
However, Pyle pointed out that the average work week fell by one-tenth of an hour to 33 hours, eliminating the equivalent of another 100,000 positions.
Added to this, average hourly earnings were unchanged for the month and weekly earnings fell 0.3 per cent — the first drop since March, Pyle said.
"In other words, the income implications from this report are worse than the headline and that's not going to be nice for retailers. So, the net read by the market has been negative," he said.
The TSX energy sector dropped by more than four per cent as the August crude contract fell by $2.58 to settle at $66.73 US a barrel on the New York Mercantile Exchange.
Suncor led the decline, losing 6.2 per cent. Talisman Energy fell 5.7 per cent, Imperial Oil lost 4.7 per cent and Canadian Natural Resources lost 4.6 per cent.
The Canadian dollar closed at 86.04 cents US, up 0.06 of a cent from Tuesday.
European stock markets also closed lower after a report showed unemployment in the 16 countries that use the euro rose to a 10-year high in May.
Britain's FTSE 100 index lost 2.45 per cent, while Germany's DAX fell 3.81 per cent and France's CAC-40 lost 3.13 per cent.
With files from The Canadian Press
