U.S. stocks declined as August payrolls data did little to bring clarity to the outlook for interest rates amid growing concern about the strength of the global economy.
The Standard & Poor’s 500 Index lost 1 percent to 1,930.81 at 9:31 a.m. in New York. The benchmark index is poised for a 2.9 percent decline for the week.
Employers added 173,000 workers in August and the jobless rate dropped to 5.1 percent, data showed. The gain in payrolls, while less than forecast, followed advances in July and June that were stronger than previously reported. The unemployment rate is the lowest since April 2008. Average hourly earnings climbed more than forecast and workers put in a longer workweek, the report also showed.
The jobs report is the last major data point before the Fed meets later this month on Sept. 16-17 to discuss the timing of its first increase in interest rates in nearly a decade.
August tends to be a pocket of “payroll weakness” even in strong years for hiring, Deutsche Bank economists wrote in a note yesterday. And history shows economists don’t have a very good handle on August — they have overestimated the August payroll prints over the past four years by an average of about 50,000.
U.S. stocks closed little changed yesterday, erasing a rally of nearly 200 points for the Dow as optimism over the European Central Bank’s revamp of quantitative easing faded. September is historically the worst month of the year for the S&P 500, with the equity gauge falling 1.1 percent on average based on data going back to 1927, according to data compiled by Bloomberg.