United States: Jobs Growth Slows

The US economy added the fewest number of jobs last month since February, increasing payrolls by just 92,000, the Department of Labour numbers showed. The figures disappointed the market, which had been looking for more than 130,000 new jobs in July. The US 4.6% unemployment rate in July was the highest since a similar 4.6% rate in January.

Some analysts said the figures were better than initial reports suggested, noting that 120,000 jobs were created in the private sector, especially in service industries. Government jobs fell by 28,000.

However the US Labour Department also revised down its estimates for job creation in each of the two prior months by a total of 8,000. It means that in the first seven months of 2007, average job growth has eased to 136,000 per month from a more vigorous 189,000 throughout 2006.

Economists warned against panicking at the figures, suggesting that growth was picking up as the year progressed and was not poised to fall into recession.

“It’s moderately softer but it’s not enough to change the overall trend of the economy,” said Pierre Ellis, senior global economist with Decision Economics. “The start of the third quarter remains relatively healthy.”

The US economy grew by 3.4% in the three months to June, which was faster than expected, but other more recent economic indicators regarding consumer spending and house building have been disappointing.