U.S. economy gains 117,000 jobs in July Private sector adds 154,000; unemployment rate falls to 9.1%

The economy added 117,000 jobs in July and the unemployment rate fell slightly to 9.1%, the government said Friday, in a better-than-expected report that temporarily calmed concerns about another recession.

On Wall Street, stocks rose after markets opened before turning sharply lower in volatile trading. Investors are still jittery after Dow Jones Industrial Average on Thursday sank more than 500 points, a stunning decline triggered partly by fresh worries about the U.S. economy.

The jobless rate has stayed above 8% for 30 straight months, the longest stretch of high unemployment since the Great Depression in the 1930s. What’s more, the drop in the unemployment rate in July stemmed mainly from a decline in the labor force as discouraged job seekers stopped looking for work. 

During times of rapid growth, the U.S. typically adds at least 200,000 jobs a month, but much larger increases would be required for months on end to yank the unemployment rate back down to pre-recession 

levels. 

The rate of hiring in July wasn’t even enough to absorb the natural increase in the labor force, which requires about 125,000 new jobs a month.

Companies in the private sector hired 154,000 workers, but governments at all levels continued to trim jobs, putting the overall gain at the critical headline figure of 117,000. 

The biggest increases occurred in health care (31,000), retail (26,000) and manufacturing (24,000). Government shed 37,000 jobs, marking the ninth consecutive decline. 

 The latest employment data, although better than forecast, ignited fresh calls in Washington to pass new laws to boost job creation. President Obama on Friday, for example, urged Congress to create a tax credit for companies that hire former members of the military.

Investors, for their part, have shown just how worried they are about the U.S. and global economy. Equity gains since the beginning of the year were wiped out entirely over the past week.

The economy has now seen growing around 2% or less in 2011, down from prior projections of as much as 3%. Few expect the jobless rate to fall much from its current level of 9.1%, meaning that many of the nation’s 13.9 million unemployed are unlikely to find work. Almost 45% have been without a job for at least six months. (Market Watch)