US employment stagnates

US stocks ended the week down after the S&P 500 tumbled 2.5 percent on Friday following a weak employment report for August. Bloomberg reports the latter:

Payrolls were unchanged, the weakest reading since September 2010, the Labor Department said today in Washington. The median forecast in a Bloomberg News survey called for a gain of 68,000. The figures included a 48,000 drop in the information industry, mostly reflecting a strike at Verizon Communications Inc. (VZ) The jobless rate held at 9.1 percent.

This report inevitably revives talk of QE3. The Bloomberg report quotes Julia Coronado, chief economist for North America at BNP Paribas, as saying: “We’ll see QE3 definitely.”

Earlier, there had also been bad news from Japan, where capital spending fell 7.8 percent in the second quarter from a year ago compared to a gain of 3.0 percent in the first quarter.

To add to the negativity, Europe's sovereign debt problem returned to the limelight on Friday with reports saying that talks between Greece and its international lenders on a new aid tranche have been put on hold.