American economy adds modest 162K jobs in July
WASHINGTON – The U.S. economy is steadily adding jobs – just not at a consistently strong pace.
July’s modest gain of 162,000 jobs was the smallest since March. And most of the job growth came in lower-paying industries or part-time work.
The unemployment rate fell from 7.6 percent to a 4?-year low of 7.4 percent, still well above the 5 percent to 6 percent typical of a healthy economy. The rate fell because more Americans said they were working, though some people stopped looking for a job and were no longer counted as unemployed.
All told, Friday’s report from the Labor Department pointed to a less-than-robust job market. It suggested that the economy’s subpar growth and modest consumer spending are making many businesses cautious about hiring.
The report is bound to be a key factor in the Federal Reserve’s decision on whether to slow its bond purchases in September, as many economists have predicted it will do. Some think July’s weaker hiring could make the Fed hold off on any pullback in its bond buying, which has helped keep long-term borrowing costs down.
Friday’s report said employers added a combined 26,000 fewer jobs in May and June than the government had previously estimated. Americans also worked fewer hours in July, and their average pay dipped.
For the year, job growth has remained steady. The economy has added an average of 200,000 jobs a month since January, though the pace has slowed in the past three months to 175,000.
Nariman Behravesh, chief economist at IHS Global Insight, called the employment report “slightly negative,” in part because job growth for May and June was revised down.
Scott Anderson, chief economist at Bank of the West, said it showed “a mixed labor market picture of continued improvement but at a still frustratingly slow pace.”
The reaction from investors was muted. Stock averages closed with modest gains. The yield on the 10-year Treasury note fell to 2.6 percent from 2.71 percent – a sign that investors think the economy remains sluggish and might need continued help from the Fed.