U.S. stock futures extended losses as employers in May added the smallest number of workers in a year and the unemployment rate unexpectedly increased.
S&P 500 futures expiring this month lost 2.2 percent to 1,280.7 at 8:32 a.m. in New York.
Payrolls climbed by 69,000 last month, less than the most- pessimistic forecast in a Bloomberg News survey, after a revised 77,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median estimate called for a 150,000 May advance. The jobless rate rose to 8.2 percent from 8.1 percent, while hours worked declined.
U.S. stocks dropped yesterday, completing the S&P 500’s biggest monthly retreat since September, as the Institute for Supply Management-Chicago Inc.’s barometer of business activity fell to its lowest level since September 2009. Data showed the economy expanded less than initially forecast in the first quarter.
Bigger job and wage gains may be needed to spur a self- sustaining increase in hiring and consumer spending that will accelerate the expansion. Nonetheless, a looming recession in the euro area and slowing growth in emerging markets like China and Brazil may prompt American companies to curb headcounts until they see more evidence the U.S. recovery isn’t faltering.
Global equities tumbled earlier today after a Chinese purchasing managers’ index showed manufacturing grew less than estimated last month. Euro-area unemployment reached the highest on record as a deepening economic slump and budget cuts prompted companies from Spain to Italy to cut jobs. The euro region is in real danger of disintegrating unless policy makers revamp the bloc’s fiscal and economic ties, Economic and Monetary Commissioner Olli Rehn said.
To contact the editor responsible for this story: Jeff Sutherland at firstname.lastname@example.org