The monthly jobs report for August shows US employers added 96,000 jobs, while the unemployment rate fell from 8.3% to 8.1%. A CNBC panel discusses the data.
By NBC News wire services
Updated at 11:50 a.m. ET: Stock indexes were wavering Friday, hugging the flat line after a crucial report on the labor market showed the U.S. economy added 96,000 jobs in August, fewer than expected, while the nation?s unemployment rate dropped to 8.1 percent.
The jobs data were disappointing. Employers were expected to have increased payrolls by 125,000 workers last month, according to a Reuters survey of economists.
The report also took the steam out of the market, which rallied strongly Thursday, lifting stock prices to their highest level since before the collapse of Lehman Brothers in 2008. The S&P 500 ended the day at its best level since May 2008, while the Nasdaq hit a 12-year high.
The fresh U.S. jobs tally comes one week after Federal Reserve Chairman Ben Bernanke left the door open to more monetary stimulus -- known as QE3 -- and described the labor market's stagnation as a "grave concern."
"We were of the view that a payroll gain of around 100,000 with downward revisions would put QE3 firmly in play and that is what we got,? said Jacob Oubina, senior U.S. economist at RBC Capital Markets in New York.
?The report overall is weak across the board. The decline in the unemployment rate was due to the decline in the labor force while earnings flat-lined. Presidential candidate Mitt Romney will have more talking points from this than Obama. Even more surprising was the optimism leading into this report after all the other data this week."
Lifting the market mood somewhat was news that China gave the green light for 60 infrastructure projects this week worth more than 1 trillion yuan ($157 billion), or 2.1 percent of China's gross domestic product. And data showed German exports unexpectedly edged up in July and imports rose even more, suggesting Europe's largest economy remains relatively resilient to the euro zone crisis.
Stock markets in Europe and Asia rallied on Friday, and yields on the debt of struggling euro zone nations fell as investors welcomed the European Central Bank's latest bond-buying plan.
The euro rose broadly on Friday as Spanish 10-year bond yields fell below 6 percent for the first time since May, helped by the ECB plan to lower borrowing costs for indebted euro zone countries.
Apple Inc has reduced its orders for memory chips for its new iPhone from its main supplier and competitor Samsung Electronics Co, a source with direct knowledge of the matter said on Friday.
SunTrust Banks Inc has accelerated a planned sale of Coca-Cola Co shares it owns in a move that it said will produce a $1.9 billion pre-tax gain and reduce volatility in its capital ratios.
Gunmaker Smith & Wesson Holding Corp raised its full-year sales forecast as it expects to continue tapping growing demand for guns in the United States and boosting production capacity.
Kraft Foods Inc warned on Thursday that 2013 earnings for its standalone international snack company would likely be lower than some forecasts due to unfavorable foreign exchange rates.
Reuters contributed to this report.
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