Employment in the U.S. rose by more than anticipated in the month of July, according to a report released by the Labor Department on Friday, although the report also showed an unexpected uptick by the unemployment rate.
The Labor Department said non-farm payroll employment increased by 163,000 jobs in July following a downwardly revised increase of 64,000 jobs in June.
Economists had expected employment to increase by about 100,000 jobs compared to the addition of 80,000 jobs originally reported for the previous month.
The stronger than expected job growth reflected a continued increase in jobs in the private sector, which added 172,000 jobs in July following an increase of 73,000 jobs in June.
Manufacturing employment saw a notable increase of 25,000 jobs, while employment in the professional and business services and the education and health services sectors increased by 49,000 jobs and 38,000 jobs, respectively.
On the other hand, the report said government employment fell by 9,000 jobs in July, extending a recent downward trend.
Despite the job growth for the month, the unemployment rate edged up to 8.3 percent in July from 8.2 percent in June. The increase surprised economists, who had expected the unemployment rate to come in unchanged.
The unexpected increase by the unemployment rate came as the more volatile household survey showed that the number of employed persons fell by 195,000 in July, exceeding the decrease in the size of the labor force.
Peter Boockvar, managing director at Miller Tabak, said, "As measured by the payroll survey, the job creation in July was encouraging in light of the growing signs of economic slowdown but wasn't equally matched by the very volatile household survey which fell and was the main factor in the rise in the unemployment rate."
"In terms of impacting Fed policy, this data point will unlikely affect their desire to do more in September if the economy doesn't get any better from here," he added.
The report also showed that average hourly earnings edged up by $0.02 to $23.52 in July. Compared to the same month a year ago, average hourly earnings are up by 1.7 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.