Washington — Hiring cooled off in July, pushing the nation’s unemployment up to 4.6 percent, a six-month high.
The fresh snapshot of employment conditions around the country, released by the Labor Department today, also showed that new job creation slowed. Employers increased payrolls by 92,000 last month, the fewest add-ons in a single month since February.
On Wall Street, stocks sank. The Dow Jones industrials were down more than 100 points in morning trading.
Job losses in construction, manufacturing, retailing and by the government blunted gains in education and health care, professional and business services, and leisure and hospitality.
Even with the uptick from June’s 4.5 percent unemployment rate, the current jobless rate is still low by historical standards.
Those with jobs, meanwhile, did see modest wage gains.
Ken Mayland, president of ClearView Economics, likened the new figures to a modest middle ground, saying the job market is “running not too hot and not too cold.” Another report showed that growth in the service sector — an engine of the U.S. economy — also slowed in July.
The latest batch of economic reports is consistent with analysts’ forecasts that the economy will grow gradually — but not like gangbusters— through the rest of this year. The economy has been coping with fallout from the sour housing market, problems with higher-risk subprime mortgages and troubles in the automotive sector.
The new employment picture was weaker than economists expected.
They were forecasting employers to add around 135,000 jobs in July and for the unemployment rate to hold steady at 4.5 percent. The new figures suggest the jobs climate wasn’t as robust as first thought at the start of the third quarter.
However, Edward Lazear, chairman of the White House’s Council of Economic Advisers, said the business appetite to hire “is still very strong.” The labor market, he said, has been a “shining beacon” even as the economy made its way through a sluggish spell over the last year.
Many economists expect the Fed to hold an important interest rate at 5.25 percent next week, extending a more than yearlong breather for borrowers. Before that, the central bank had boosted rates for two years to thwart inflation.
Fed Chairman Ben Bernanke and his colleagues, however, still believe inflation is a potential threat to the economy. One of the things they are watching closely is whether the sturdy labor market — which has allowed some workers to command higher wages and benefits — could add inflationary pressures.
