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US jobs data add to markets' growth concerns

Associated Press Modified: July 6, 2012 at 11:30 am •  Published: July 6, 2012

LONDON (AP) — Stock markets slid while the euro fell to a two year low on Friday as investors fretted about the global economy following worse than expected U.S. jobs figures.

The 80,000 increase in payrolls in June was slightly below market expectations for an increase of about 90,000 and was not enough to reduce the unemployment rate, which remained at 8.2 percent.

May's payrolls increase was revised down, meaning the U.S. economy has added just 75,000 jobs a month in the April-June quarter, compared with 226,000 a month in the first quarter.

The figures reinforced the idea that the U.S. economy has lost traction. That's important, especially at a time when Europe appears headed back to recession and the Chinese economy is coming off the boil.

"Chilled by global economic and domestic fiscal concerns, American businesses are no longer creating jobs fast enough to reduce the unemployment rate," said Sal Guatieri, an analyst at BMO Capital Markets.

Investors responded by selling off stocks and the euro, which often loses ground against the dollar in risk-averse times. Europe's single currency fell to $1.2282, the first time it's been below $1.23 since June 2010.

In stock markets, Germany's DAX closed down 1.9 percent at 6,410.11 while the CAC-40 fell 1.9 percent to 3,168.79. The FTSE 100 index of leading British shares ended 0.5 percent lower at 5,662.63.

In the U.S., the Dow Jones industrial average was down 1.4 percent at 12,714 while the broader S&P 500 index fell 1.3 percent to 1,350.

Rising concerns over the global economy this week have snuffed out the relief generated by last week's European Union summit, which was generally seen as a positive step in any resolution to Europe's debt crisis.

Instead of cheering the rate cuts in Europe and China on Thursday, investors worried that the central banks were responding to an unexpectedly sharp drop in the economy.

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