The U.S. unemployment rate inched up from 6.1 percent to 6.2 percent last month even as employers hired 209,000 more workers, the Labor Department reported Friday.
The July job gains represented a deceleration from the 229,000 jobs added in June and the stunning 298,000 jump in job growth in May, but were identical to the average monthly job gain over the last year, the department said.
The gains were concentrated in manufacturing, construction, retail and professional and business areas such as architecture and engineering. Mining and social assistance employment also were up substantially, while other areas of employment such as government, finance and temporary work were close to unchanged.
In a month of modest gains, the average workweek was unchanged at 34.5 hours, while average earnings edged up a penny to $24.45 an hour — leaving the annual gain in wages at 2 percent.
“It’s not through-the-roof exciting, but the recovery continues,” said Justin Wolfers, economics professor at the University of Michigan.
The report has a “slight edge of weakness” that the media will overstate because of the small rise in unemployment, he said, but at long as jobs keep growing by over 200,000 a month, it indicates the economy remains “healthy.”
The softer than expected employment report somewhat pleased the stock market, which had plunged on Thursday over fears that a too-strong performance by the economy might prompt the Federal Reserve to raise interest rates sooner than expected.
The Dow Jones industrial average, which plummeted by over 300 points on Thursday, had been due to drop another 100 points at the opening of New York trade at 9:30, but it curbed those losses to a 16-point decline, according the Dow futures index,
After a volatile day of trading, the Dow ended the day down 70 points at 16,493.
“With companies reporting growing uncertainties to the business outlook, it’s perhaps not surprising that the rate of job creation is showing sign of cooling and could continue to ease in coming months,” said Chris Williamson, chief economist at Markit.
In a recent survey by Markit, businesses reported they were taking “a cautious approach to hiring due to the escalating situations in Russia and Gaza as well as uncertainties about the potential cost impact of ‘Obamacare’,” he said.
“These numbers mean discussions at the Fed about the timing of the first interest rate hike look set to intensify.” Mr. Williamson said. But “there are no signs of worrying inflationary pressures in the labour market, so it’s hard to see how an argument for raising interest rates can be won.”