Commodities extended their decline, touching the lowest level inalmost eight months, after U.S. employers created fewer jobs thaneconomists estimated and Chinese manufacturing slowed.

The Standard & Poor's GSCI Spot Index fell 2.1 percent to583.53 at 10:27 a.m. in New York, after touching 578.35, the lowestlevel since Oct. 4. The index has dropped 6 percent this week,heading for a fifth straight decline and the biggest sinceSeptember. Oil, natural gas and gasoline led the losses.

U.S. payrolls climbed by 69,000 last month, less than the mostpessimistic forecast in a Bloomberg News survey, Labor Departmentfigures showed today in Washington. China's Purchasing Managers'Index fell to 50.4 in May from 53.3 in April, China's statisticsbureau and logistics federation said today in Beijing. Euro areaand U.K. manufacturing contracted.

“The U.S. payroll numbers were significantly weaker thanexpected and the PMI out of China and the U.K. were terrible aswell,” said Jason Schenker, president of Prestige Economics LLC, anAustin, Texas-based energy consultant. “We're getting very weakdata going into June and the markets don't like it. Economies areslowing and demand will fall.”

Commodities also dropped after a report showed unemployment inthe euro area reached 11 percent in April and March, the highestsince the data series started in 1995. The European debt crisisthat began in Greece has spread to Ireland, Portugal, Italy andSpain, has curbed economic growth and demand for fuel.

Crude Oil

Crude oil for July delivery fell $2.64, or 3.1 percent, to$83.89 a barrel on the New York Mercantile Exchange. The contractdropped to $82.56, the lowest intraday price since Oct. 7. Pricesfell 17 percent in May, the biggest slide since December 2008.

Brent oil for July settlement fell $2.91, or 2.9 percent, to$98.96 a barrel after falling as low as $97.70 on the ICE FuturesEurope exchange in London, the lowest level since Feb. 8, 2011.Brent is down 7.8 percent this year.

Natural gas for July delivery dropped as much as 9 cents, or 3.7percent, to $2.332 per million British thermal units on the Nymex.Futures are down 22 percent this year and dropped to a 10-yearintraday low of $1.902 on April 19.

Copper fell in New York, heading for the longest streak ofweekly declines in two years. Copper futures for July deliveryretreated 1 percent to $3.333 a pound on the Comex after falling to$3.30, the lowest this year.

On the London Metal Exchange, copper for delivery in threemonths was 0.3 percent lower at $7,386.50 a metric ton ($3.35 apound). Aluminum, tin, lead and nickel also fell in London. Zincrose. The LME will be closed June 4-5 for U.K. public holidays.

Gold rose the most since Sept. 27 on speculation that theFederal Reserve will take steps to stimulate growth. Gold futuresfor August delivery jumped 3.2 percent to $1,613.70 an ounce at10:21 a.m. on the Comex in New York.

Silver futures for July delivery climbed 2.6 percent to $28.49an ounce on the Comex. Prices fell 11 percent last month.

The GSCI Spot Index dropped 13 percent last month, the worstmonthly loss since November 2008.

Bloomberg News

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