Us employers hired a meagre 32,000 extra workers in July, government figures showed Friday, shocking markets worldwide and shattering hopes of a labor market rebound.

The report seemed to show a jobs spurt, in which 1.5 million new positions have been generated since August 2003, fizzling out.

Private economists had generally predicted a gain of 243,000 net jobs.

Those expectations evaporated.

Employment in June, too, was weaker than previously reported, the Labor Department said, with net jobs up just 78,000, far lower than the modest 112,000 initially estimated.

stunned investors sent the Dow Jones industrial average plummeting 147.70 points, or 1.48 percent, to finish at 9,815.33, the lowest close since November 2003.

The jobs news could be a blow to President George W. Bush, fighting for reelection on November 2, in part on the strength of a rebounding labor market following years of heavy job shedding.

"Our economy's been through a lot," Bush said in a campaign speech at stratham, New Hampshire.

"I'm running because I understand how to take a strong economy to make it stronger. I say we have a

strong economy, and it's getting stronger," he told cheering supporters in a field strewn with bales of hay.

Democratic challenger John Kerry pounced on the report to accuse Bush of mismanagement.

"The president keeps saying we've turned the corner. But unfortunately today's job numbers further demonstrate that our economy may be taking a U-turn instead," Kerry said in a statement.

sluggish job growth also cast doubt over the Federal Reserve's determination to keep pushing up interest rates at a measured pace, with a quarter-point rise anticipated next week.

"It is very disappointing, it indicates that (the) economy is stuck in a soft patch for a much longer period than we anticipated," said Wells Fargo Bank chief economist sung Won sohn.

He expected the Federal Reserve to raise interest rates at the next meeting Tuesday but to suspend the tightening cycle in september if further signs of labor market weakness emerge.

One bright note emerged from the labor market report: The unemployment rate, measured by a separate Labor Department survey of households, dipped to 5.5 percent in July from 5.6 percent in June.