Figures revealed only 80,000 jobs were created in the US in June, substantially lower than the 100,000 forecast.
The data provides further evidence that the eurozone debt crisis is sapping confidence across the globe after China yesterday cut its interest rate for the second time in a month.
Sterling rose a cent to 1.26 euros, but fell to 1.55 US dollars.
On the Footsie, heavily-weighted miners were among the biggest fallers, with Evraz down 5%, or 11.6p at 246.2p.
Meanwhile, the banking sector continued to suffer in the wake of the Libor-fixing scandal, as the SFO's decision to launch a criminal investigation highlighted fears of more revelations to come.
Barclays was down 3.5p to 164.8p and taxpayer-backed Royal Bank of Scotland and Lloyds Banking Group were 5.7p lower at 201.5p and 0.5p to 30.3p respectively.
Retail chain Marks & Spencer was 3% lower, down 11.2p at 318p, as analysts braced for a downbeat trading update next week. Dismal weather is expected to have hit sales of M&S summer clothing and experts predict the group may need to revise down its margin guidance if it has had to mark down ranges.
Insurer Aviva was among the biggest risers after it sold half its stake in Dutch rival Delta Lloyd for £318 million as part of a major turnaround plan.
Shares rose 1% following the successful deal, which kicks off executive chairman John McFarlane's plan to scale back the group following the resignation of chief executive Andrew Moss. The overhaul announced yesterday will see 16 of 58 divisions exited or wound down. Shares rose 3.4p to 288p.
In the FTSE 250, construction group Carillion slumped 6%, off 16.5p to 251.4p, after a broker downgrade.
Elsewhere paving stone maker Marshalls fell 8%, dropping 6.9p to 80p, after it reported a £10 million sales hit from the rainy weather seen since April.
The group warned of job losses as it cuts costs to tackle the sliding sales.
Cast iron cooker firm Aga Rangemaster was also in the red after the group said first half profits would be lower. Sales are being impacted by "patchy" consumer demand, said the group. Shares fell 5.1p to 66.5p.
International Consolidated Airlines was up 3.5p to 159.2p, SSE ahead 22p to 1416p, Imperial Tobacco rose 40p to 2579p and Pennon Group rose 11p to 770p.