The unemployment rate rose to 6.2% from 6.1%, the Labor
Department said Friday, as 329,000 Americans, including many who had given up
their job searches, surged back into the labor force. Economists had estimated
that 238,000 jobs were created last month. Although July's gains fell short of
estimates and average monthly job growth of nearly 230,000 so far this year, it
marked the sixth straight month of 200,000-plus employment increases — the
longest such stretch since 1997.
Businesses added 198,000 jobs, led by professional and
business services, manufacturing, retail and construction. Federal, state and
local governments added 11,000. Job gains for May and June were revised up by a
total 15,000. May's was revised to 229,000 from 224,000 and June's to 298,000
Economists expect continued solid job growth the rest of the
year, though many companies remain cautious because of overseas political
turmoil and concerns about the new health care law. In July, professional and
business services led the job gains, with 47,000. Manufacturers added 28,000;
retailers, 27,000; construction, 22,000; and leisure and hospitality, 21,000.
Healthy payroll advances in manufacturing and construction —
middle-income sectors that each lost about 2 million jobs in the recession —
are encouraging signs. Some other labor market indicators were mixed. The
number of Americans out of work at least six months rose by 74,000 to 3.2
million. The long-term unemployed still make up 33% of all the jobless.
Over the past year, wages have risen 2%, in line with the
modest increases so far in the five-year-old recovery. Economists expect pay
hikes to pick up in the second half of the year, with industries such as
leisure and hospitality and construction already showing a pickup.
A positive sign is
that most of July's job gains went to full-time workers, partly reversing huge
advances by part-time workers at the expense of full-time employees in June. The
government said the economy grew at a better-than-expected 4% annual pace in
the second quarter and revised its estimate of the first-quarter's contraction
to 2.1% from 2.9%. A strengthening economy is expected to support further job
growth. Rapid employment gains have bolstered consumer confidence, which hit a
seven-year high in July.
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