There are genuine concerns the world's largest economy is heading toward a recession, and the fear is gripping global financial markets.
Analysts say further economic and financial markets weakness could put pressure on central banks to ease monetary policy.
The US Federal Reserve announced late this week it was leaving official interest rates unchanged at between 5.25 per cent and 5.5 per cent. The problem is that, like Australia, the Federal Reserve is reluctant to cut interest rates until it sees further evidence inflation is cooling. "But the gains were reversed as global growth worries left the market up just 0.3 per cent or so for the week, with falls in financial, health and material stocks mostly offsetting the gains in all the other sectors."
Non-farm payrolls grew by just 114,000 last month, the Labor Department reported, a slowing from 179,000 jobs added in June and below the 185,000 expected by economists polled by Dow Jones.US stocks fell heavily on the assumption demand in the economy is set to dive. lost 2.43 per cent to close at 16,776.16, bringing the decline for the tech-heavy index from its recent all-time high to more than 10 per cent.
Marcus Today market analyst Henry Jennings said, fundamentally, global investors had been spooked by the prospect of a US recession."The economic data flashes a warning on the economy and recession talk is back again.
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