Ailing global economy weighing on U.S.

washington» A sagging global economy has finally caught up with the United States.

Nervous employers pulled back on hiring in August and September as China’s economy slowed, global markets sank and foreigners bought fewer U.S. goods. Friday’s monthly jobs report from the government suggested that the U.S. economy might be weakening.

Lackluster growth overseas has reduced exports of U.S. factory goods and cut into the overseas profits of large companies. Canada is in recession. Emerging economies, from Brazil to Turkey, are straining to grow at all.

A result is that economists now expect the Federal Reserve to delay a long-awaited increase in interest rates, possibly until next year.

Employers added just 142,000 jobs in September, and the government lowered its estimate of gains in July and August by a combined 59,000. Monthly job growth averaged a mediocre 167,000 in the July-September quarter, down from 231,000 in the April-June period.

The unemployment rate remained a low 5.1 percent but only because many Americans have stopped looking for work.

U.S. stock prices have tumbled as fears of a global slowdown have intensified. On Friday, major indexes fell hard at the opening of trading, with the Dow Jones industrial average losing as much as 258 points, then reversed course.

The Dow gained 200.36 points, or 1.23 percent, to close at 16,472.37. The Standard & Poor’s 500 index surged 27.54 points, or 1.4 percent, to 1,951.36. The Nasdaq composite rose 80.69 points, or 1.7 percent, to 4,707.78.

Volatile financial markets can make businesses too anxious to expand and hire.

“We’re back to a period of what I call corporate caution,” said Nariman Behravesh, chief

Gasoline price trends

The average price of a gallon of regular unleaded gasoline:

$2.38

2.43

2.29

$2.45

2.50

2.29

$2.73

2.76

2.45

$3.43

3.45

3.33 economist at IHS. “It’s wait and see. If things stabilize, we could see hiring come back.”

Some analysts, like Michael Gapen, chief U.S. economist at Barclays Capital, say they remain confident in the economy’s resilience. Gapen said he thinks underlying drivers of the U.S. economy can power through overseas pressures.

“The consumer is in much better shape, and the housing sector is in better shape,” he said. “This is something that is more of a soft patch.”