Economy adds 163K jobs, unemployment rate inches up

CBS/iStockphoto

(AP) 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, roughly the same as last year's pace. That's not enough to satisfy the 12.8 million Americans who are unemployed.

The government uses two surveys to measure employment. A survey of businesses showed job gains. The unemployment rate comes from a survey of households, which showed fewer people had jobs. Economists say the business survey is more reliable.

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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 after the report came out 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 also prompt the Federal Reserve to hold off taking 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.

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 job 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.

[ronjula-2012]

let's get this jobs issue straight,people started losing jobs under bush sr. doing the first gulf war according to forbes,then after clinton was elected job growth was visible,and after the plant of the aid to dethrone clinton,bush jr was elected,and according to forbes,job lost began intensely,and so did the treasury began to depleted.and so to but blame,the country elected Obama, to take the fall. boy,i wish facts were put on the table,and show the true blame on the gop.

[sandy 1027]

This report isn't great, but it isn't all bad either. "Desperate times call for desperate measures".The president has made proposals to improve jobs growth-even GOP proposals that they have tabled because he co-opted them.Even with global factors involved,our economy would still be in a better place if Congress had been doing its job instead of obstructing our progress by rejecting most of the president's proposals,just to hamstring him.They, themselves haven't presented reasonable, serious alternatives.Under our system of government,they are the legislative body,and also control the purse strings, ; so they have an obligation to find solutions , but they have breached it.In the past, we remedied our economic woes ,due to the Great Depression and recessions, by being proactive, and having public/private investments in our economy and jobs.The economy during Reagan's and Clinton's tenures were nothing like it is today; yet they worked together under a divided government.They did the hard things together,all parties involved putting ideology and partisanship aside ;and compromising ,when necessary, for the good of the country .Reagan raised taxes 11 times, and Clinton did welfare reform.If Reagan and Clinton had had this Congress, their presidencies would have looked very different, and would have been much less effective.I am an Independent , and believe that neither party has ALL of the right answers, on every issue.Right now, what we need is the best ideas from BOTH parties to fix this problem.I am also a Christian, and believe , as Christ said that "...Every kingdom ( country) divided against itself is brought to desolation..." ( Matthew 12:25).If ideological/partisan differences aren't put aside , that will be us.

[milt3726]

Since Obama has been in office:
1. 85% of polled say they are not better off.
2. Labor force has dropped ~7 million jobs/workers.
3. Middle class net worth down 40%.
4. Greatest debt in US history.
5. Greatest middle class tax increase in US history.
6. First US credit downgrade in US history.
7. Lowest percent paying taxes lowest in modern era.
8. Highest government dependence in US history.
9. Housing ownership is down to 1960's levels.
10. Percent living in extreme poverty is at all-time high.
11. Obama pushed and congress approved the unconstitutional Obama care bill (with penalty not tax) and the Supreme Court ruled it unconstitutional. In addition many other unconstitutional acts such as the "dream act" which costs law abiding citizen jobs.
Be that likely voter and go to the polls on November 6th 2012 and vote the Blamer/Complainer/Campaigner-in-Chief out of office!

[milt3726]

The unemployment went to 8.3%. President Obama continues to disappoint the American people without any real solutions for how to turn this country around. Instead, he continues to campaign full time and ignore the dismal reality facing most families. It is simply unacceptable.

"Last week President Obama said, 'We tried our plan, and it worked.' With the unemployment rate going up again, it's obvious that plan didn't work at all," Be that likely voter and go to the polls on November 6th 2012 and vote the Blamer/Complainer/Campaigner-in-Chief out of office!

[Larnan5]

To make it short. If these Republican governors had not fired hundreds of thousands of teachers, police. firemen, civil servants etc. we would be in great recovery. These people would have been consumers and adding to the economy and tax rolls. Instead, these layoff added to the recession and prevented a recovery. The idea of laying off people and cutting taxes at the same time is ridiculous. We needed a stimulus, infrastructure projects etc. The Republic house blocked every attempt.Romney has no plan.

[Martha12345]

Another Obama Home Run !! It's time for the lies, excuses and diversions to come to an end. Obama needs to go back to Chicago and help Rahm screw up that city even further.

[rider1956]

We need a president that has experience with job creation; not a president who excels at organizing feel-good rallies.

Many Americans felt that we made up for past sins by electing Barry Soetoro as president. Now our children will be paying for them for decades.

[fredisalive]

Obama is an idiot for not telling Americans how the GOP has stopped all efforts at moving this economy forward. That we are creating any jobs with that rickety congress is amazing!

[milt3726]

Republicans have sent more than 40 jobs bills to the Senate, which continue to sit on Democrat Senate Leader Harry Reid's desk. These bills will put Americans back to work. However, instead of signing them, the Democrats and this Administration continue to play politics with American lives

[Lucky12345678]

The Obama economy continues to rise, that is the unemployment rate to 8.3%... What this country needs is four more years of the Obama administration and we'll be well over 10%!!! Now that's change you can believe in, FORWARD...

Remember that the initial jobs total will be reduced DOWNWARD next month, just like June's!

[PSnoBS]

You do realize that his policies have lowered our unemployment from over 10% already right...?

An increase in unemployment that small is expected in even healthy economies from time to time.

[alGalli]

"Stronger job creation could help President Barack Obama's re-election hopes." A gratuitous comment hoping to salvage something for a hopeless Obama. A small example of how the press tries to influence the news for the Democrats.