More Hiring In July, But Jobless Rate Up To 8.3 Percent

job report july unemployment

By Lucia Mutikani


WASHINGTON -- U.S. employers in July hired the most workers in five months, but an increase in the jobless rate to 8.3 percent will probably keep expectations of additional monetary stimulus from the Federal Reserve intact.

Nonfarm payrolls rose 163,000 last month, the Labor Department said on Friday, beating economists expectations for a 100,000 gain. The report was dimmed somewhat by the increase in the jobless rate from 8.2 percent in June, even as more people gave up the search for work. In addition, employment for May and June was revised to show 6,000 fewer jobs created than previously reported.

The closely watched employment report comes two days after the U.S. central bank sent a stronger signal that a new round of major support could be on the way if the faltering recovery does not pick up.

Most economists expect the Fed will launch a third round of bond purchases, possibly at its next policy meeting on Sept. 12-13.

That's despite the approach of the U.S. presidential and congressional elections in November, which could leave the central bank open to criticisms from Republicans who have made the weak economy a centerpiece of their campaigning.

The Fed has held interest rates close to zero for nearly four years and pumped about $2.3 trillion into the economy.

At the Fed's next meeting in September, policymakers will also have had a chance to see August's payrolls report.

The labor market slowed sharply after strong gains in the winter, spelling trouble for President Barack Obama.

A recent Ipsos/Thomson Reuters poll showed 36 percent of registered voters believe Republican presidential candidate Mitt Romney has a better plan for the economy, compared to 31 percent who had faith in Obama's policies.

The unemployment rate has been stuck above 8 percent for more than three years, the longest run since the Great Depression.

Fears of deep government spending cuts and higher taxes that are due to begin in early 2013 and fears that Europe's debt crisis could get worse have dissuaded employers from hiring, economists say.

Economists say the biggest factor weighing on sentiment is fear that politicians in Washington will be unable to avoid the so-called fiscal cliff at the turn of the year.

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Limited Job Destruction

"We are not seeing large scale layoffs, so job destruction is pretty limited," said Scott Brown, chief economist at Raymond James & Associates in St Petersburg, Florida.

"The problem all along has been a lack of hiring and we expect that the uncertainty about the elections, the fiscal cliff and Europe may restrain the pace of hiring as well as capital spending," Brown said before the release of the report.

Data last week showed the economy grew at an annual pace of 1.5 percent in the second quarter, far short of the 2.5 percent rate needed to keep the unemployment rate stable.

The private sector again accounting for all the job gains, adding 172,000 new positions.

Government payrolls dropped by 9,000, as local governments laid off teachers.

Construction employment dipped 1,000, despite increases in home building. Manufacturing payrolls increased 25,000, largely because of fewer layoffs in the auto sector as manufacturers kept production lines running during the month.

Within the vast services sector, employment gains were widespread. Temporary help services increased 14,100. Businesses are hiring temporary workers due to the uncertain outlook.

Hiring in the utility sector was restrained by a strike at a power firm in New York last month.

Average hourly earnings increased 2 cents last month, suggesting consumer spending will struggle regain steam after it slowed sharply in the second quarter.

The average workweek was unchanged at 34.5 hours.






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rmweld

SOOOOOOOO, in other words,after all the HYPE AND SPIN--------Unemployment is still more ,not less.

August 04 2012 at 8:51 AM Report abuse rate up rate down Reply
super dad

In about 4 weeks, late on a Friday afternoon, those 163,000 new hires reported will be "adjusted" down to about 125,000. It seems that every job report gets adjusted down a few weeks after being reported.

August 04 2012 at 8:09 AM Report abuse +2 rate up rate down Reply
rjen164497

Silver Linning? What leftest BS. It's just great that more people are not working. It is just great that 14.5 % of Americans can't find jobs. That's right, true unemployment is almost 15%. Could be worse? What an idiot. Tell those 14.5 % that Obama is doing a great job.

August 04 2012 at 7:52 AM Report abuse +2 rate up rate down Reply
rrpatreilly

Why are the American people being sold a bag of garbage reporting inaccurate unemployment numbers? This is unacceptable! They now have more accurate numbers showing over 14% unemployment that counts the Americans still unemployed although not being counted as having exhausted their unemployment benefits. The job market has shrunk and this also has skewerd the unemployment numbers to make them appear better than they are. The democrats talk a good game about creating jobs and infrastrure spending. This could not be any further from the truth. The two largest democrat states in America, California and New York are spending over 1.4 billion dollars on infrastructure bridge repair. This will create over 2,000 decent paying jobs. Unfortunately the contracts were given to a company from China and they will be using Chinese laborers. Just more sound good feel good rhetoric from the left that is no good for America. How about some bitching and moaning from the good union members who back the democrat party with boat loads of money but losing jobs for government contracts? The silence from the unions is deafening!

August 04 2012 at 7:51 AM Report abuse +1 rate up rate down Reply
susan

Thanks Obama, for signing with S Korea, Panama and Columbia for those 70,000 jobs.. Very few will benefit ua. and he says Romney outsourced Jiobs, what 70,000 jobs to 3 other countries.... yup let bash another when you do the same thing at home.. And Im a dem...ticked but still a dem

August 04 2012 at 7:22 AM Report abuse +1 rate up rate down Reply
John C Black

How can 36% of Americans think Romney has a better plan for recovery when nobody including him knows what his plan is?

August 04 2012 at 6:11 AM Report abuse -4 rate up rate down Reply
1 reply to John C Black's comment
susan

And Obamas is what, he didnt sign the pipeline jobs, then he hasnt the ability to run the country (heis statement a few weeks ago) the CIA in Syriam giving arms and military aid tot he rebels, and since that has been in the news the last month, Obama had to open and up an say it was his secret.... Some secret since we all knew about weeks ago. Just watch and see, November is going to be interesting.

August 04 2012 at 7:26 AM Report abuse +3 rate up rate down Reply
lifehub

A 'silver lining' in being unemployed. Right. Jackazzes.

August 04 2012 at 4:39 AM Report abuse +3 rate up rate down Reply
lifehub

The nation's jobless rate is deliberately and falsely being under-reported by liberalistic AOL.

August 04 2012 at 4:31 AM Report abuse +3 rate up rate down Reply
Jim Edwards

AOl & The Huffington Post kill me. Silver lining, are they insane, there is no silver lining on unemployment. They try to sugar coat Obama constantly. Why don't they just admit what most people know. He is a dismal failure at everything he does.

August 04 2012 at 1:11 AM Report abuse +5 rate up rate down Reply
Gary Cangemi

Obama is a complete and utter failure as President. He's been in way over his head since day one. The economy is not recovering, it is in shambles. Our grocery bills keep rising thanks to his hatred of the oil industry. Our homes aren't worth crap thanks to his destruction of the housing market. Millions are out of work because he'd rather dole out unemployment checks and food stamps rather than stimulate job growth. He is so bad he is starting to make Jimmy Carter look reaganesque. He is a consummate LIAR and a shameless corrupt Chicago style political thug. Only a politically retarded, self-loathing, socialist, liberal psychopath would ever consider voting for this miscreant for a second term.

August 04 2012 at 12:29 AM Report abuse +6 rate up rate down Reply

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