Positives seen in job numbers

WASHINGTON - Employers added 163,000 jobs in July after three months of sluggish hiring, a pleasant surprise that could signal the U.S. economy may shake off a midyear slump.

The economy has added an average of 151,000 jobs a month this year, although that's not been enough to drive down the unemployment rate, which ticked up to 8.3 percent from 8.2 percent in June.

Nevada's July jobless rates won't be out until Aug. 17, but the Silver State's unemployment rate stayed at 11.6 percent from May to June. Joblessness in Las Vegas rose from 11.8 percent to 12.1 percent in the same period, though economists attributed the jump mostly to normal seasonal fluctuations that aren't reflected in state numbers.

Nevada added 200 new private-sector jobs from May to June, and 17,500 private-sector jobs year over year in June. The gains came from more than two years of visitation increases in Southern Nevada, where the hospitality industry added 20,000 jobs year to year in June. Offsetting the hiring activity were cuts in construction and finance.

The Labor Department's employment report did little to settle the political debate about the economy, with Obama administration officials and Gov. Mitt Romney seizing on the data to bolster their campaigns.

Before Friday's report, economists increasingly worried a slowdown in hiring and growth from April through June could worsen and become long-lasting. Now they're breathing a little easier.

"After a string of disappointing economic reports ... we'll certainly take it," said James Marple, senior economist at TD Economics.

Stocks rose sharply on the news. The Dow Jones industrial average added 217 points, closing at 13,096. The Standard & Poor's 500 gained 26 points, to 1,391.

The government uses two surveys to measure employment trends. Hiring is measured through a survey of businesses. The unemployment rate comes from a survey of households and is calculated by dividing the number of people who say they are unemployed by the size of the labor force. In July, more people said they were unemployed, while the labor force shrank.

A better outlook on hiring could make the Federal Reserve reluctant to take more action to spur growth. The Fed, which ended a two-day policy meeting Wednesday, signaled a growing inclination to act if hiring doesn't pick up.

Some economists say job gains need to be greater for the Fed to hold off.

Paul Ashworth, senior U.S. economist for Capital Economics, said the job gains were a "vast improvement" over the past four months. Still, they were well below the average 252,000 jobs a month added from December through February.

"It also isn't strong enough to drive the unemployment rate lower, which is what the Fed really wants to see. So, on balance, we doubt this would be enough to persuade the Fed to hold fire in September," Ashworth said.

Stronger job creation could help President Obama's re-election hopes. Still, the unemployment rate has topped 8 percent since his first month in office - the longest stretch on record.

No president since World War II has faced re-election with unemployment over 8 percent.

In remarks at the White House, Obama said the private sector has added 4.5 million jobs in the past 29 months, though he acknowledged that too many too many people remain out of work.

"We've got more work to do on their behalf," he said.

Romney, the presumptive GOP presidential nominee, focused on the rise in unemployment.

"We've now gone 42 consecutive months with the unemployment rate above 8 percent," Romney said in a statement. "Middle-class Americans deserve better, and I believe America can do better."

The economy remains weak more than three years after economists declared the recession over, in June 2009. Growth slowed to an annual rate of 1.5 percent in the April-June quarter, down from 2 percent in the first quarter and 4.1 percent in the fourth quarter of 2011.

U.S. growth could also be hampered by a weak global economy. Much of Europe is in recession; growth in China, India and Brazil has slowed.

Worries have also intensified that the U.S. economy will fall off a "fiscal cliff" at year's end, when tax increases and deep spending cuts kick in unless Congress reaches a budget deal. Fed Chairman Ben Bernanke warns recession could follow.

Those factors give employers "plenty of reasons for caution," said Nigel Gault, an economist at IHS Global Insight. He expects monthly job gains of only 100,000 to 150,000 through December.

The July job gains were broad-based. Manufacturing added 25,000 jobs, the most since March. Restaurants and bars added 29,000. Temporary services added 14,100. Retailers hired 7,000 more. Education and health services gained 38,000, while governments cut 9,000.

Average hourly wages also increased by 2 cents, to $23.52. In the past year wages have increased 1.7 percent, matching the inflation rate.

Review-Journal writer Jennifer Robison contributed to this report.