Employment in the U.S. increased by less than economists had expected in the month of July, according to a report released by the Labor Department on Friday, although the unemployment rate still fell to its lowest level in over four years.
The Labor Department said non-farm payroll employment increased by 162,000 jobs in July following a downwardly revised increase of 188,000 jobs in June.
Economists had expected employment to increase by about 175,000 jobs compared to the addition of 195,000 jobs originally reported for the previous month.
Despite the weaker than expected job growth, the unemployment rate dipped to 7.4 percent in July from 7.6 percent in June. The unemployment rate had been expected to edge down to 7.5 percent.
With the bigger than expected decrease, the unemployment rate fell to its lowest level since hitting 7.3 percent in December of 2008.
Commenting on the impact of the report, Sal Guatieri, Senior Economist at BMO Capital Markets, said, "While we still lean toward the Fed announcing a tapering of asset purchases in September, we will need to see a good bounce in August employment and in the economic data to get there."
"Although the unemployment rate has moved lower, the recent economic softness will raise doubts among policymakers about whether this progress can be sustained," he added.
The job growth in July reflected the addition of 157,000 jobs in the service-providing sector, although that reflects a slowdown from the increase of 188,000 jobs in June.
While the report showed an acceleration in the pace of job growth in the retail sector, fewer jobs were added in the temporary help services and healthcare and social assistance sectors.
The Labor Department also said averagely hourly employee earnings edged down $0.02 to $23.98 in July after jumping by $0.10 in June. Average hourly earnings are still up by 1.9 percent year-over-year.
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