Markets in the US took a dive on Friday (US time) when a government report showed no job growth last month, at a time of sagging consumer confidence.
Economists raised new concerns about recession after the US Labour Department said private-sector employment, previously the main engine for job growth as revenue-strapped government departments shed workers, "changed little" in most major industries.
AFP reported a meagre 17,000 private-sector jobs were added in August, down from a revised 156,000 in July. But those were offset by 17,000 jobs shed by the Government.
Craigs Investment Partners broker Chris Timms yesterday said job numbers were particularly important as they were an indication of economic growth.
"Employment growth and economic growth go hand-in-hand. If the economy is stronger, jobs will flow. Fewer jobs indicates a stopping of economic growth.
"At the moment, people are looking for any indication of things getting better in the US."
US commentators were reported as saying the "job machine" had ground to a halt and that the US had already entered or was at least close to entering another recession.
It was the first time in 10 months the US economy had not produced net growth in non-farm payrolls.
"The stagnation in US payroll employment is an ominous sign," said Paul Ashworth, an economist at Capital Economics. "The broad message is that even if the US economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower."
The Labour Department said the unemployment rate remained unchanged at 9.1% from July. It was the 28th month the jobless rate has been at 9.0% and above.
The number of unemployed people was essentially unchanged at 14 million.
The jobs data for August was the worst since September 2010, when the economy lost more than twice the number of jobs it created. The pace of job growth remains far below the expansion needed to reduce the high unemployment rate.
Yesterday, Mr Obama urged a divided congress to pass a clean extension of the transportation Bill, a measure financing road building and other infrastructure projects.
The president warned that failure of congress to act would be disastrous for the economy, costing nearly one million workers their jobs over the next year and almost $US1 billion ($NZ1.18 billion) in highway funding after the first 10 days.
His speech to a joint session of congress on Thursday (US time) will be when Mr Obama is expected to lay out a plan to create jobs and stimulate the moribund economy.
Mr Timms said New Zealand's sharemarket would take its lead from the US and he expected the NZX-50 index to fall this morning on light volume before taking a lead from Australia, when markets opened at noon NZ time, and from Asia.
The Dow Jones Industrial Index plunged 2.2% on Friday, the technology-rich Nasdaq was down 2.6% and the broad-based Standard & Poor's index dropped 2.5% in Friday trade.
"We will feel the impact of those falls but I think most people are not feeling it is doom and gloom for us. I expect our market will be weak, but not dramatically," Mr Timms said.
