US Jobs Fall Sparking Fears Of Wider Impact From Sub-Prime

The number of jobs within the US economy has fallen through August, according to figures released today which analysts predicted would have shown a substantial increase.

The figures released today by the US Department of Labor reflected a reduction of 4,000 in the US workforce, sparking fears that the wider economy was beginning to show the effects of the sub-prime situation.

Analysts were shocked at the figures released today, with the figure expected to be somewhere closer to an increase of 11,000 jobs within the economy over the same period.

The Department of Labor cemented the figures by reducing its forecast for the number of new jobs created in June and July by over 81,000, adding to the suggestion that the economy could be in for a rough few months.

This is the first loss of jobs overall within the US economy for over 4 years, since when in 2003 the number of jobs decreased by 42,000, reflecting the potential depth of the situation for the wider US economy.

The news hit the world markets hard, with investors already lacking confidence in stock investments. Just twenty-four hours after the former Federal Reserve Chairman suggested the current climate is reminiscent to the run-up to previous recessions, markets have closed heavily down through this afternoon.

The fall is being put down to expanding pressures from within the sub-prime lending sector. With banks less willing to lend money to one another, and credit becoming less readily available, businesses are expected to feel the brunt of harsh banking trends through shorter credit lines and less ambitious growth support.

With the sub-prime sector still far from clarified, the situation looks likely to continue to have an impact on the wider economy, with business and economic growth slowed significantly as a result.

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