U.S. job gains modest; jobless rate falls
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U.S. employers added 162,000 jobs in July, a modest increase and the fewest since March. At the same time, the unemployment rate fell to a 4 1/2-year low of 7.4 percent, a hopeful sign.
Unemployment declined from 7.6 percent in June because more Americans found jobs and others stopped looking and were no longer counted as unemployed.
Still, 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.
Long Island's unemployment rate in June, the most recent month it was calculated by the state Labor Department, was 6.1 percent, down from 7.5 percent a year earlier. Unlike the national unemployment rate reported Thursday, the local rate isn't adjusted for seasonal variations in employment.
Friday, the government said U.S. employers added a combined 26,000 fewer jobs in May and June than it previously estimated. Americans worked fewer hours in July, and their average pay dipped. And many of the jobs employers added last month were for lower-paying work at stores, bars and restaurants.
For the year, job growth has remained steady. The U.S. economy has added an average 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 national 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. The Dow Jones industrial average initially slipped on the news but rose slightly by the end of the day.
The Federal Reserve will review the July employment data in deciding whether to slow its $85-billion-a-month bond purchases in September, as many economists have predicted it will do. Weaker hiring could make the Fed hold off on any pullback in its bond buying, which has helped keep long-term borrowing costs down.
Beth Ann Bovino, senior economist at Standard & Poor's, said she thinks Friday's report will make the Fed delay a slowdown in bond buying. "September seems very unlikely now," she said. "I'm wondering if December is still in the cards."
More than half of July's job gain came from lower-paying industries, extending a trend that is limiting Americans' incomes and possibly slowing consumer spending. Retailers, for example, added nearly 47,000 jobs -- the biggest gain for any industry last month. Restaurants and bars added 38,400.