Economy adds 173,000 jobs in August- U.S. Dept Labour said

That was below the 217,000 predicted by analysts, although the Labor Department said that figures for August tend to be revised higher subsequently.

The unemployment rate fell to 5.1% - down from the July figure of 5.3%.

The rate is the lowest since April 2008.

 

Wall Street headed lower following the numbers, with the S&P 500 falling 1.3% and the Dow Jones industrial average shedding more than 200 points or 1.2%.

European stock markets, which had been trading lower before the data was released, extended their losses, with the FTSE 100 in London down 2% and indexes in Paris and Frankfurt dropping about 2.6%.

Focus on the Fed

There were upward revisions to the number of jobs created in the previous two months, which added another 44,000 jobs. The revised figure for July was 245,000 jobs.

The weaker-than-expected August number could make Fed officials think twice about increasing rates when they meet on 16-17 September.

Chris Williamson, chief economist at Markit, said the decline in the unemployment rate could be the clincher for a September rise. 

However, he added: "The most likely scenario is one where the Fed waits a little longer in the light of recent economic and financial market instability, instead merely testing financial market reactions with rhetoric that a rate rise is increasingly imminent."