Stocks slump after report showing sharp drop in U.S. hiring

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Federal Reserve

Signs that the job market is slowing down are renewing investor concerns that the U.S. economy is losing steam.

Fear, long absent in financial markets as investors bet on a soft landing for the U.S. economy, is back in the air on Wall Street.Stocks opened sharply lower Friday after new government data showed a steep decline in hiring in July, spurring concerns that economic activity is slowing faster than economists expected. Shortly after the start of trade, the blue-chip Dow Jones Industrial Average slid 461 points, or 1.1%, to 39,887. The broader S&P 500 sank 1.

Some analysts think the Federal Reserve has waited too long to lower interest rates, raising the risk of a 'hard landing' for the economy or even a recession. Economists also said signs that the job market is faltering makes it all but certain that the Fed will lower its benchmark rate in September in a move to ease borrowing costs and keep the economy from stalling. The central bank could cut by as much as 0.

 

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