U.S. Hiring Slows In July But Jobless Rate Falls To 4-Year Low

jobs unemployment rate nonfarm payrolls economy employment employersBy Jason Lange

WASHINGTON -- U.S. employers slowed their pace of hiring in July but the jobless rate fell anyway, mixed signals that could make the U.S. Federal Reserve more cautious about drawing down its huge economic stimulus program.

The number of jobs outside the farming sector increased by 162,000, the Labor Department said Friday.

That was below the median forecast in a Reuters poll of 184,000. Compounding that miss, the government also cut its previous estimates for hiring in May and June.

At the same time, the jobless rate fell two tenths of a point to 7.4 percent, its lowest in over four years. Gains in employment fueled some of that decline, but the labor force also shrank during the month, robbing some of the luster from the decline in the unemployment rate.

The data reinforces the view that the job market is inching toward recovery, with the broader economy still stuck in low gear.

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"The U.S. economy is grinding along for the better, but it's going to be a long and slow grind," Tanweer Akram, an economist at ING U.S. Investment Management in Atlanta, said ahead of the report.

The question is whether the pace of job gains is enough for the Fed to feel the U.S. economy is ready to get by with less support. The U.S. central bank currently buys $85 billion a month in bonds to keep borrowing costs low.

The stimulus program has lowered interest rates, spurring growth in the country's beleaguered housing market and boosting car sales. Fed Chairman Ben Bernanke said last month the U.S. central bank would likely reduce the level of monthly purchases by the end of the year, and end them by mid-2014.

The Fed's policymaking committee wrapped up a two-day meeting Wednesday without any change to the program. The panel's statement, however, referenced new factors that could be seen as risks to growth: a recent rise in mortgage rates and persistently low inflation. Central bank policymakers next meet in September.

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The growth in payrolls left the three-month average gain at 175,000. Many economists believe even hiring around that level could lead the Fed to trim its bond buying in September.

But Friday's jobs report could also entertain darker views on the economy.

For one, analysts wonder if the pace of job creation can be sustained given slower-than-expected economic growth.

Gross domestic product, a measure of the nation's economic output, grew at a mere 1.4 percent annual rate in the first half of the year, down from 2.5 percent in the same period of 2012.

Most economists expect GDP will accelerate in the second half of this year, which would make it more plausible for the current hiring trend to continue.

But the fact that job creation has been relatively robust despite weak output might point to a frightening possibility: perhaps the economy's growth potential has fallen.

This would mean less output is needed to create jobs, but that incomes would grow at a slower pace over the long run. The prospect of such a structural shift worries economists and investors.

"It's something we have been talking about a lot," Jeffrey Cleveland, a Los Angeles-based economist at investment management firm Payden & Rygel, said ahead of the report.

Friday's report showed the average work week declined to 34.4 hours, while average earnings slipped 0.1 percent.

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More bad news for the GOP!

August 03 2013 at 5:16 PM Report abuse -1 rate up rate down Reply
1 reply to JIMMY G's comment

Its you pea brains who voted the current administration in. The numbers do not reflect anything good. It was lower than expected, the jobs were entry level very low paying and part time, not to mention it DOES NOT include the number of people who no longer are considered "looking for work" that is, because you're a liberal idiot who doesn't read. what it means is that someone who has exhausted not only their state benefits but also the federal benefits, which for someone like you means that the persons who were being counted do not receive any assistance. That is over 100 weeks of assistance in which this administration has done NOTHING to help people who want to work. The number further reflects this administrations stupidity because the true UE rate is closer to 15% and higher for minorities. If anything, smart rich people know that it's all smoke and mirrors. the number will be adjusted, next month, to be a lot lower than the made up inflated numbers that are being manipulated and published now. but you already know that because you are so "educated"....moron

August 06 2013 at 1:02 PM Report abuse rate up rate down Reply

All this unemployment rate goin down is a bunch of foolery. Ya'll should be ashamed of ya'll selves for tellin them lies. Aint no unemployment goin down.

August 02 2013 at 4:50 PM Report abuse +5 rate up rate down Reply

The problem is consumer confidence, who has the confidence to borrow and spend when gas and everything else is so expensive and the price keeps changing almost everyday of the week which reflects the costs of everything else. Until we have regulation again if we ever do to keep prices stable and not so expensive due to speculation from investors we will never see a full recovery, plus those jobs that do become available are not really jobs with the low salaries and little to no benefits they offer, even for those with education beyond high school or those with years of work experience.

August 02 2013 at 3:26 PM Report abuse +2 rate up rate down Reply
The Macway

Jobless 'recovery.'

August 02 2013 at 12:41 PM Report abuse rate up rate down Reply

WHAT A LIE!! All those Americans who's unemployment benefits ran out are not included in their numbers. Also all those small business owners who have closed their businesses that can't draw unemployment . . . and believe me there are many of them. I cannot believe how many people continue to believe all the lies. DO YOUR RESEARCH PEOPLE . . . DON'T BELIEVE ME!!

August 02 2013 at 12:27 PM Report abuse rate up rate down Reply

First of all, I don't believe this made up number. Second of all, the people who have found jobs have more than likely taken part time or low paying jobs not in their field. Many have just stopped looking for work so they aren't counted in this totally fabricated number. Wise up America. They only throw out the low number to keep the masses pacified for another month.

August 02 2013 at 12:15 PM Report abuse +2 rate up rate down Reply
1 reply to Jan's comment

Jan - you naïve and ignorant....read about the adjustments and the details....then you'll realize the scam going on at 1600

August 06 2013 at 1:08 PM Report abuse rate up rate down Reply

People, if anyone out there actually believes that out of the entire able-bodied, workforce of the US that only 7.4% are not working, then I have a $120,000 condo iin Vegas that I will sell for only $500,000. During Bush's time unemployment peaked at around 20%( total), and right now I will bet actual unemployment is close to 18%. Neither side will ever publish the real number because they don't want to see the bad numbers.

August 02 2013 at 12:07 PM Report abuse +5 rate up rate down Reply

We need real jobs, and not the ones that won't even fill up the tank.

August 02 2013 at 11:59 AM Report abuse +2 rate up rate down Reply

LMAO ! Yeah, the reason its at a 4 yr low, is because hundreds of thousands of people lost their last tier of UI benefits.

Has nothing to do with jobs added. Those that do not turn in a bi-weekly form, for their benefits, are considered not counted as unemployed. Meaning, if your benefits ran out, you cant turn in a bi-weekly form anymore, therefore you are not counted as being unemployed ! The only way you are counted as being unemployed is if you turn in a form.

Dont drink the Koolaid folks, and buy into these still false numbers ! Just saying !

August 02 2013 at 11:49 AM Report abuse rate up rate down Reply
Keith Thompson

Dang, i hate when there is positive news on the interwebs. (sarcasm)

August 02 2013 at 11:33 AM Report abuse +1 rate up rate down Reply

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