The US economy added a higher-than-expected 117,000 jobs in July, slightly reducing the unemployment rate in a rare bit of good news for the struggling economy, the Labor Department said Friday.But economists said it was barely a dent in the overall jobless number, and warned the economy still appeared very weak.The private sector generated 154,000 jobs in July, easily offsetting a loss of 37,000 positions in the public sector -- many of which came after the Minnesota state government shut down in a raging political fight over spending and union benefits.The net figure was much better than the 84,000 jobs economists had forecast.
But nearly 14 million Americans remain out of work by the official figure, which does not count millions more who have dropped out of the jobs market entirely in the past two years.
"The July jobs report was not as bad as May and June. That's about the best that we can say for it," said Nigel Gault of IHS."Recent trends still look perilously close to stall speed for the economy."
President Barack Obama, under assault from opposition Republicans for the weak economy, welcomed the data but warned the unemployment rate was still too high at 9.1 percent, down from 9.2 percent in June."While this marks the 17th month in a row of job growth in the private sector... we have to create more jobs than that each month to make up for the more than eight million jobs that the recession claimed," Obama said."What I want the American people and our partners around the world to know is this: we are going to get through this, things will get better."Republicans said the still-high jobless rate demonstrated the failure of Obama's economic policies."Today's unemployment report is more proof that all of the Washington spending, taxing and regulating is devastating our economy," said Republican House Speaker John Boehner, the number-three US elected official.The Labor Department revised the figures for June to 46,000 net jobs (from 25,000) and for May, 53,000 (from 18,000).
Though much brighter than before, the three-month average remains well below the estimated 100,000 or more needed just to accommodate new entrants to the workforce to meet the growing population -- much less to cut the overall number of jobless Americans.
Altogether 13.9 million Americans were still unemployed in July, better than June but still higher than March's 13.5 million.The lower overall jobless rate was helped more by the fact that some 200,000 people dropped out of the labor market."If the labor force had remained at June levels, the unemployment rate would have remained at 9.2 percent, said Jeffrey Rosen of Briefing.com.After plunging over fears of a new global economic downturn on Thursday, US markets jumped sharply higher upon opening Friday after the jobs data came out.
But by 1630 GMT the Dow Jones Industrial Average -- which lost 4.3 percent Thursday -- was showing an 0.7 percent loss.Austan Goolsbee, Obama's top economic advisor, said the economy had hit a slow patch in the first half of 2011, driven in part by Japan's March earthquake disaster, the surge in oil prices, and instability in Europe.
"We took some heavy blows for the first half of this year," he said on Bloomberg television.
"But now all the focus has got to be, how do we get the growth rate back up in the second half of the year?"Figures released in recent weeks mostly point to the US economy having stagnated over the past two months, and suggest businesses have been hesitant to hire while the government was locked in a political battle over long-term economic policy and the debt ceiling.
Meanwhile, under pressure to trim their budget deficits, government authorities at all levels -- federal, state and local -- have been cutting staff.Goolsbee dismissed worries of a second recession, two years after the last one ended.
"If we are growing, if we are adding 2.4 million jobs over 17 months, those are not the things that a double-dip recession looks like."