Paul Davidson

USA TODAY

The high-flying labor market showed no let-up in July as employers added 209,000 jobs.

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, according to the median forecast from Action Economics survey.

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 from 288,000.

Chris Williamson, chief economist at Markit, expects continued solid job growth the rest of the year, though he says many companies remain cautious because of overseas political turmoil and concerns about the new health care law.

"The employment outlook therefore looks to be one of further robust job creation in coming months, but with some moderation in the rate of job creation compared to the first half of the year," he says.

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.

And the so-called underemployment rate — which includes discouraged workers who have stopped looking for jobs and part-time employees who prefer full-time work as well as the unemployed — ticked up to 12.2% from 12.1%.

The average work week was unchanged at 34.5 hours for the fifth straight month. Employers often add hours before adding staffers. Hourly earnings rose just one cent to $24.45.

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 labor market's recovery has broadened recently, with solid job gains spreading to industries such as architecture and engineering, finance and computers. Previously, the increases were dominated by low-wage jobs in sectors such as restaurants and home healthcare.

This week, 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.











