US employers added 163,000 jobs in July, new figures show, a hopeful sign after three months of sluggish hiring.
However, officials said the unemployment rate rose to 8.3 per cent from 8.2 per cent in June.
July’s hiring total was the best since February but the economy has added an average of 151,000 jobs a month this year, roughly the same as last year’s pace, which is not enough to satisfy the 12.8 million Americans who are unemployed.
The rate increased because the government uses two surveys: A survey of businesses showed job gains, but a survey of households showed fewer people had jobs. Economists said the business survey is more reliable.
High unemployment could hurt President Barack Obama’s re-election hopes. No president since the Second World War has faced re-election with unemployment over 8 per cent.
Investors appeared pleased with the report.
Futures tracking the Standard & Poor’s 500 index and the Dow Jones industrial average gained about 1 per cent. The stock market had seen four days of losses. Yields on government bonds also rose after the report came out as investors moved money out of low-risk assets.
A better outlook on hiring could also prompt the Federal Reserve to hold off taking more action to spur growth. The US central bank, which ended a two-day policy meeting on Wednesday, suggested in a statement a growing inclination to take further steps if hiring does not 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.
Despite July’s job gains, the economy remains weak. Growth slowed to an annual rate of 1.5 per cent in the April-June quarter, down from 2 per cent in the first quarter and 4.1 per cent in the final three months of 2011. Manufacturing activity shrank for the second straight month in July.