Saturday, 8 September 2007

Markets fall with US nonfarm payrolls

Stock markets in the US and Europe plunged yesterday.

Perhaps the interest rate hike by Sweden's central bank had something to do with it? From Bloomberg:

Sweden's Riksbank raised its benchmark interest rate to a four-year high to contain inflation, adding that the financial market turmoil will prevent it from picking up the pace of rate increases.

The central bank increased the repurchase rate by a quarter point to 3.75 percent, the ninth increase since January 2006, the Stockholm-based bank said today in a statement. It kept a June forecast that the key rate would reach about 4 percent by year-end and 4.5 percent in two years.

More likely, though, investors just didn't like yesterday's US employment report for August. MarketWatch reports those details:

Nonfarm payrolls fell by an estimated 4,000 in August, the Labor Department said. This is the first decline since August 2003.

The nation's unemployment rate held steady at 4.6%...

Adding to the sense of weakness in employment, payrolls in June and July were revised lower by a cumulative 81,000. Read the full report.

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