A nasty week that hopefully is not going to be a precursor of more to come.

Markets in the US and around the globe suffered falls of 3% to more than 5% in a reminder that the bears haven't gone away and remain just under the surface everywhere.

Some ended at 7 and 9 month lows.

The falls last week left America's Standard & Poor's 500 index just 23 points away from dropping under the 1,000 point market for the first time in nine months. The index ended on Friday at 1,022.58.

Hopefully there won't be too much more pain to come, but judging by the poor June US jobs report on Friday night, that might be a wish we can't guarantee.

The gloom level in the US about the economy seems to have deepened over the weekend, gone is the grasping for a bright spot in the figures.

The best that can be said is that the US economy isn't melting down, as the super pessimists had it doing after last Wednesday's global gloom.

The number of jobs created fell short, the number of jobs lost was higher than expected, the number of people looking for work fell sharply and the number of people looking for work, but unable to find, it soared on a year ago.

There was nothing in the report to convince anyone that there could be a way out of the current malaise for the economy.

Probably the most interesting development last week was the way the US dollar turned down on Wednesday, and kept falling against the euro and other currencies.

Even though returns in the US for investors from government bonds remain higher than in Germany or Japan, for major investors there's now the added belief that the American economy is going lower, with no sign of where the current bout of softness might end.

If this goes on now for several months, it could actually end up as good news with a lower dollar slowing lifting inflation away from its current path to deflationary levels.

But all it will take is for another big sell off in Europe based on dodgy or incomplete bank stress tests raising fears about the health of the eurozone financial system, or the failure by one or two countries to support the 750 billion euro back up package agreed to in May.

Certainly last week was a tough one for equities, especially in the US.

For the week the Dow fell 4.5%, the Standard & Poor's 500 lost 5% and the Nasdaq shed 5.9%.

On Friday the Dow lost 46 points, or 0.5%, Nasdaq slipped 9 points, or 0.5%, and the S&P 500 index dropped half a per cent as well.

In fact the Dow and Nasdaq ended at fresh 8-month lows and the S&P 500 at a 9-month low.

US employers cut 125,000 jobs last month, more than the 100,000 job cuts expected by economists, with most of the decline coming from the ending of 225,000 temporary Census jobs.

Private employers added 83,000 jobs, down from the 112,000 economists forecast.

Other weak data on Friday came in new orders for US factories, which showed the sharpest drop since the depth of the recession and the first decline in nine months.

That followed weak manufacturing surveys for the US, China and Europe earlier in the week.

The unemployment rate dropped to 9.5% from 9.7% in May. Economists thought it would rise to 9.8%.

Economists said, however, that the fall was due to the US labour force shrinking by 652,000 people last month, which tells us people are becoming discouraged from looking for work.

World markets: European markets were mixed Friday with Britain's FTSE 100 adding 0.7%, Germany's DAX losing 0.4% and France's CAC 40 gaining 0.3%.

The Stoxx Europe 600 Index fell 4.5% last week, the biggest drop for six weeks.

It is now down 13% this year so far.

Bloomberg pointed out that all 18 major markets in western Europe fell.

Germany's DAX lost 3.9%, France's CAC 40 slid 4.9% and London shed 4.1%.

Asian markets: were also mixed, with Japan's Nikkei rising 0.1%, Hong Kong's Hang Seng falling 1.1%, the Shanghai Composite rising 0.4% and Sydney broadly flat after the new resources tax sparked an early rise.

The MSCI Asia Pacific Index fell 3.4% last week, to be down 7.3% this year so far.

China's Shanghai Composite Index dropped 6.7%, Hong Kong's Hang Seng slipped 3.8%, Japan's Nikkei lost 5.5%, after the yen strengthened for a fourth week.

Australia's: ASX 200 Index dropped 4% and South Korea's Kospi Index sank 3.4%.