Employers Add More Jobs Than Expected

By Toni Vranjes

August 5, 2011

The July employment report wasn’t as bad as feared, but analysts are still jittery about the state of the economy.

The report showed that payrolls increased by 117,000, beating economists’ expectations of 85,000 new jobs. The unemployment rate fell slightly, from 9.2 percent to 9.1 percent. Last month, the number of people in the labor force dropped by 193,000.

Employment growth occurred in several industries: health care, retail trade, manufacturing and mining. But government employment fell by 37,000.

Despite the better-than-expected report, worries remain. The report comes on the heels of a particularly scary day in the stock market, with the Dow plunging 512 points on Thursday.

In a commentary on the July numbers, IHS Global Insight Chief U.S. Economist Nigel Gault wrote that there’s still a high risk the economy is falling back into recession. He noted that employers created only 72,000 jobs on average over the past three months, compared to an average monthly increase of 215,000 from February through April.

He added the unemployment went down because of a declining labor force, not rising employment.

“The report is a relief amid the recent market turmoil, but does little to alleviate fears for the future,” Gault wrote.

 

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