(USA TODAY) - Employers added 162,000 jobs in July, adding to worries that the labor market may finally be wobbling a bit amid federal spending cuts and a payroll tax increase.
The unemployment rate fell to 7.4% from 7.6%, the Labor Department said Friday.
A consensus forecast of economists had estimated that 185,000 jobs were added last month.
Hopes for stronger-than-expected employment gains grew after reports Thursday showed that initial jobless claims fell sharply last week and payroll processor ADP estimated that the private sector added 200,000 jobs in July.
Average monthly job gains in that ballpark through the first half of the year have outpaced economic growth. The government said this week that the economy grew at an annual rate of 1.7% in the second quarter, a weak pace but better than economists had predicted. First-quarter growth, however, was revised down to 1.1% from 1.8%.
The economy is expected to pick up late this year as the impact of the federal deficit-cutting fades. Until then, analysts have been wondering if economic growth will begin to match the stronger hiring pace, or if the labor market will finally sputter without better economic growth. Some economists have downplayed the solid payroll advances, noting that many of the new jobs are part-time positions in low-wage industries.
By Paul Davidson, USA TODAY