Marcus Evans Group | Worldwide Headquarters | American Offices | Latin America | European Offices | African / Asian Offices

Dow Jones dips amidst American labour market gloom

The Dow Jones industrial average of the United States’ largest listed companies turned only briefly positive in opening trading before drifting down 0.18% to 11395.

Pessimism about a stagnant labour market was compounded by expectations amongst traders and economists that Federal Reserve chairman Ben Bernanke is unlikely to initiate a third round of quantitative easing when he speaks later today.

Federal officials are reported to be deeply divided over the benefits of further electronic monetary easing.

Eswar Prasad, an economist for Cornell University, said:

“Given the level of opposition coming out of the woodwork, it will be very difficult for the chairman to pre-emptively announce any further moves for monetary policy.”

The US government cut interest rates to near zero almost three years ago and has promised to keep them at that level for a further two years. To boost the economy, it bought .3 trillion of long term bonds from banks using electronically created money.

President Barack Obama is to make a speech on job creation later today. America’s weak economic growth seems to be withering, with employers having added no new jobs on balance in August, and the unemployment rate remaining stuck at 9.1pc.

Data released today by the Labor Department showed applications for unemployment benefits rose to 414,000 in the week ended 3 September, up from 412,000 in the prior week. However, the trade deficit narrowed considerably in July, suggesting higher growth in the third quarter.

Wall Street’s downbeat mood did not spread to London, where by mid afternoon the FTSE100 had maintained the morning’s modest gains, reaching 5323 points, a 0.09% increase on the previous day’s trading. © 2011 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds