Sharemarket falls on US recession fear: Economy roundup

The Australian sharemarket has the jitters this morning, falling more than 2% as fears that the US will slide into recession are fuelled by weak jobs data.

The S&P/ASX200 index was down 1.9% mid morning to 6186.9 before falling further to 6173.1 at 12.20pm today.

The fall was widely expected after the US Labor Department reported that jobs in November had grown by just 18,000, with the US unemployment rate jumping from 4.7% to 5%, a two year high. The bad data fuelled speculation that the US Federal Reserve may be forced to cut interest rates by half a percentage point at its 30 January meeting.

The US equity markets fell last Friday with the Dow Jones Industrial Average losing 1.96%, losing almost 2%, while the S&P500 was off 2.46% and the NASDAQ shed 3.77%.

The Australian dollar has meanwhile opened lower. At 7.00am, the Australian dollar was trading at $US0.8719 from Friday’s close of $US0.8811 before rising to $US0.8734 at 12.30pm today.