WASHINGTON (MarketWatch) — The U.S. economy did not add any jobs in August, a weak performance that casts a cloud over the sputtering recovery, economic data showed Friday.

Nonfarm payrolls were unchanged in August, lower than the 53,000 gain expected by economists surveyed by MarketWatch and the weakest performance in nonfarm payroll since a decline in September 2010.

David Resler, chief economist at Nomura Securities International Inc., who had expected a weak report, blamed it on a “financial wall of worry” in early August.

Stocks fell sharply during the fractious debate in Congress over raising the debt ceiling and after the U.S. lost its triple-A rating from Standard & Poor’s.

“Things went into a dead stall,” Resler said. Businesses decided to “sit back and see how things shake out.”

“It is not an outright collapse of the economy but hiring was going to be put on hold for a month, or two, or three,” he said.

A now-concluded strike at Verizon Communications Inc. VZ, +0.42% did trim 45,000 from August payrolls, the department said.

The unemployment rate held steady at 9.1% in August, as expected. Read the full report from the Bureau of Labor Statistics.

Treasury prices jumped following the disappointing data. Yields on the benchmark 10-year note TMUBMUSD10Y, 0.693% fell to 2.069%. U.S. stocks SPX, +0.82% opened to heavy losses, though a report about lawsuits against banks over bad mortgages also contributed to the weak start.

“Yesterday’s data [on ISM manufacturing] failed to point to a sharp slowdown in the U.S. economy. Today’s don’t point to any kind of self-sustained virtuous circle, though. Is zero growth in employment the kind of signal Ben Bernanke was waiting for to announce QE3? Maybe,” said Alexandra Estiot, an economist at BNP Paribas.

Details contained in the August jobs report were weak.

Payroll counts in June and July were revised lower by a cumulative 58,000. Payrolls rose a revised 20,000 in June and by 85,000 in July.

The average workweek for August edged down by six minutes to 34.2 hours.

Average hourly earnings on the month fell 0.1% to $23.09. Economists had been expecting a 0.1% gain. Earnings are up 1.9% in the past year.

The grim report could serve as a catalyst for further Federal Reserve easing.

Fed Chairman Ben Bernanke has said the central bank will meet for two days later this month to explore whether more easing measures are needed.

Resler said he thought the Fed was “leaning toward some additional accommodative move.”

The top options, according to the minutes of the Federal Open Market Committee’s Aug. 9 meeting, was either to lengthen the maturity of the Fed’s balance sheet or purchase additional assets.

The economy has been looking quite fragile over the past month. Consumer confidence has plunged in the wake of financial market gyrations, and many economists say another recession is certainly possible.

President Barack Obama is expected to unveil a plan to spur job growth in a speech to Congress next Thursday night.

Katharine Abraham, a member of Obama’s Council of Economic Advisors, said in a statement that Obama would lay out a series of steps that Congress could take to boost employment, including making it easier for small businesses to hire workers, and focusing on infrastructure improvement.

House Speaker John Boehner blamed the weak job growth on “the triple threat of higher taxes, more failed ‘stimulus’ spending, and excessive federal regulations.”

He said Republicans would focus on “removing barriers to job growth, whether it’s eliminating unnecessary regulations that drive up prices or stopping Washington from spending money it doesn’t have.”

Labor Secretary Hilda Solis blamed the lack of job growth on “political gamesmanship” on Capitol Hill.

“This Congress took the nation to the brink of default. We knew that this legislative gridlock was going to have repercussions,” Solis said.

In August, payrolls of goods-producing industries decreased by 3,000, including 3,000 lost in manufacturing.

Manufacturing job growth has averaged 14,000 over the past four months, down from an average of 35,000 per month over the first four months of the year.

Health care added 30,000 jobs over the latest month.

Government employment continued to trend down, falling by 17,000 in August, the 10th straight monthly decline. State government employment was little changed despite the return of an estimated 22,000 Minnesota state employees after a government shutdown in July.

An alternative gauge of unemployment, which includes discouraged workers and those with part-time employment, rose to 16.2% in August from 16.1% in the prior month.

The number of unemployed people rose slightly to 14 million from 13.9 million in July. More than 6 million workers have been out of work for 27 weeks or longer.

The unemployment rate for African-Americans jumped to 16.7% in August from 15.9% in July. This is the highest rate since July 1984.