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Pace of Hiring Rose in July, but Jobless Rate Ticked Up

Continuing a long slog upward from the depths of the recession, the American economy added 163,000 nonfarm payroll jobs in July, the Labor Department said on Friday. That compares to a revised 64,000 jobs in June.

July’s job growth was higher than economists had been expecting, but still signifies the economy is just barely treading water.

For context, the economy now produces as many goods and services — more, in fact — than it did before the downturn officially began in December 2007. But it does so with almost five million fewer jobs.

And the pace at which the economy has been adding jobs in the last few months is just barely fast enough to absorb the growth in the labor force. As a result, the unemployment rate remained mostly unchanged, ticking up to 8.3 percent from 8.2 percent.

Economists had been expecting that another poor month of job growth would virtually guarantee more stimulus from the Federal Reserve. After its meeting this week, Fed officials said they acknowledged that the economy was slowing and stood ready to take additional stimulus measures.

It’s not clear what Friday’s numbers portend for Fed action. Given that the unemployment rate has basically stagnated since January, the Fed may decide to jump in with either another round of asset purchases or other actions when it meets next month.

How effective such additional measures would be, of course, is still being debated, given that the Fed has pumped so much money into the economy already.

“This is the weakest recovery we’ve ever seen, weaker even that the recovery during the Great Depression,” said Neal Soss, chief economist at Credit Suisse, said before the report was released. “If you’re not scared by that, then you’re not paying attention.”

Economists are not expecting job growth to pick up much anytime soon. Concerned about the European debt crisis and the draconian American fiscal tightening scheduled for the end of the year, companies are starting to retrench.

“Truly, what I’m worried about is that corporate profits have not been as good in the last six months as they had been before,” Mr. Soss said.

Government payrolls, which have been shedding workers almost every month for the last two years, have been a drag on overall employment growth.

Forecasts for gross domestic product growth in the third quarter of this year have fallen in recent days on the heels of other disappointing economic news from manufacturing and consumer spending.