U.S. Economy Adds 163,000 Jobs, Unemployment Rate Rises to 8.3%

by The Associated Press Aug 3rd 2012 9:48AM
Unemployment rises
By CHRISTOPHER S. RUGABER

WASHINGTON -- U.S. employers added 163,000 jobs in July, a hopeful sign after three months of sluggish hiring.

The Labor Department said Friday that the unemployment rate rose to 8.3 percent from 8.2 percent in June.

July's hiring was the best since February. Still, the economy has added an average of 151,000 jobs a month this year -- enough to keep up with population growth but not enough to drive down the unemployment rate.

"After a string of disappointing economic reports ... we'll certainly take it," said James Marple, senior economist at TD Economics.

The government uses two surveys to measure employment. A survey of businesses showed job gains. The unemployment rate comes from a survey of households and is calculated by dividing the number of unemployed people by the size of the labor force. In July, more people said they were unemployed, while the size of the labor force shrank even more.

Economists say the business survey is more reliable.

Investors appeared pleased with the report. Futures tracking the Standard & Poor's 500 index and the Dow Jones industrial average gained about 1 percent. The stock market is coming off four days of losses. Yields on government bonds also rose as investors moved money out of low-risk assets.

Stronger job creation could help President Barack Obama's re-election hopes. Still, the unemployment rate has been above 8 percent since his first month in office -- the longest stretch on record. No president since World War II has faced re-election with unemployment over 8 percent.

A better outlook on hiring could make the Federal Reserve reluctant to take more action to spur growth. The Fed, which ended a two-day policy meeting Wednesday, signaled in a statement a growing inclination to take further steps if hiring doesn't pick up.

But some economists say the job gains need to be greater.


Paul Ashworth, senior U.S. economist for Capital Economics, said July's job gains were a "vast improvement" over the past four months. Still, they were well below the average 252,000 jobs a month added from December through February.

"It also isn't strong enough to drive the unemployment rate lower, which is what the Fed really wants to see. So, on balance, we doubt this would be enough to persuade the Fed to hold fire in September," Ashworth said.

The job gains were broad-based. Manufacturing added 25,000 jobs, the most since March. Restaurants and bars added 29,000. Retailers hired 7,000 more workers. Education and health services gained 38,000. Governments cut 9,000 positions.

Average hourly wages also increased by 2 cents. Over the past year wages have increased 1.7 percent -- matching the rate of inflation.

Despite July's gains, the economy remains weak more than three years after economists declared the recession had ended in June 2009. Growth slowed to an annual rate of 1.5 percent in the April-June quarter, down from 2 percent in the first quarter and 4.1 percent in the final three months of 2011.

Manufacturing activity shrank for the second straight month in July, a private survey said Wednesday. Consumer confidence improved slightly last month but remains weak.

Rising pessimism about the future is taking a toll on businesses and consumers, many economists say. Europe's financial crisis has weakened that region's economy, hurting U.S. exports. Worries have also intensified that the U.S. economy will fall off a "fiscal cliff" at the end of the year. That's when tax increases and deep spending cuts will take effect unless Congress reaches a budget deal. A recession could follow, Fed Chairman Ben Bernanke has warned.

Americans are responding by spending less and saving more. A big reason growth slowed in the second quarter was that consumer spending, which accounts for roughly 70 percent of economic activity, slowed to an annual growth rate of 1.5 percent. That was down from 2.4 percent in the first quarter.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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580 Comments

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clintonfield

Face it; unemployment will continue to be high until the election is over. The powers that are against President Obama will do everything in their power to make the president look bad. Unemployment will continue to rise. Gas prices will continue to rise. Than they talk about how raising the taxes for the 1-2 percent of the wealthy will raise unemployment. Well they have been given this tax break for over eight years and they are not hiring. They are only demanding more! More from the middle class! More tax breaks for them. Well everyone should pay the same percentage in taxes. If I pay 10 -15 % in taxes, the wealthy two percent should do the same. They do not complain when they give a 5 to 10 percent across the board pay raise; well if you are making $250,000.00 or more that is a lot of money, but when you are making medium wages that is only pennies. They think it is fair when across the board pay rate is the same, but it’s murder when you ask them to take the same tax rate.

August 06 2012 at 8:32 AM Report abuse rate up rate down Reply
3 replies to clintonfield's comment
Master Sixkiller

Three Cheers and a Ho-raw Bread and water for all. How many jobs lost that you are not being told about?

August 06 2012 at 8:11 AM Report abuse rate up rate down Reply
marilyn

OK, SO IS THERE ANY NEW!!!!! NEWS!!!!!!!! A JOB.....HMMMMM..WTF IS THAT????????????????

August 06 2012 at 2:03 AM Report abuse +1 rate up rate down Reply
1 reply to marilyn's comment
j.doobie

Barry doesn't know either, he hasn't created one net job yet in almost four years, but managed to keep unemployment over 8 % and get 49 million on food stamps. He really is the food stamp president.

August 06 2012 at 8:13 AM Report abuse +1 rate up rate down Reply
democracks0

Other then the thrill Evan gets running up his leg from Obama, another thrill he gets is signing in under all his different screen names to vote comments down multiple times. I would laugh but it's really pathetic.

August 06 2012 at 12:27 AM Report abuse +1 rate up rate down Reply
democracks0

I wonder if Obama will ask people to sell their foodstamps and donate the money to his campaign fund. Evan probably will.

August 06 2012 at 12:14 AM Report abuse +1 rate up rate down Reply
democracks0

Evan posted something about him liking to inbreed. How disgusting. But then again it's Evan.

August 06 2012 at 12:09 AM Report abuse rate up rate down Reply
3 replies to democracks0's comment
democracks0

Maybe if Obama wasn't traveling around in his Canadian made buses and partying with the 1% he'd have time to meet with his jobs council instead of lying and saying he's laser focused on jobs.

August 06 2012 at 12:07 AM Report abuse +1 rate up rate down Reply
democracks0

If anyone is looking for lies to post you can always use some of Evans lies. There's so many of them.

August 06 2012 at 12:05 AM Report abuse rate up rate down Reply
j.doobie

nite kool kids, go kiss barry's arse Evan

August 06 2012 at 12:05 AM Report abuse rate up rate down Reply
democracks0

Bill Clinton said Obamas in way over his head. I'm surprised he didn't follow up with saying that Obama wasn't even a good community organizer.

August 06 2012 at 12:04 AM Report abuse +1 rate up rate down Reply
1 reply to democracks0's comment
j.doobie

Monica was over Bill Clinton's head too.

August 06 2012 at 12:07 AM Report abuse +2 rate up rate down Reply