WASHINGTON (AP) — U.S. employers added 162,000 jobs in July, the fewest since March. But the gains were enough to lower the unemployment rate to a 4-year low of 7.4 percent.
The Labor Department said Friday that the rate fell from 7.6 percent in June. But that was one of the few good signs in an otherwise lackluster report.
Fewer jobs were added in the previous two months than earlier estimated. Americans worked fewer hours and their pay dipped. The figures suggest weak economic growth may be making businesses cautious about hiring.
The Federal Reserve will pay particularly close attention to the figures as it decides whether to scale back its $85 billion monthly bond purchases later this year.
In a related note, consumers increased their spending in June at the fastest pace in four months even though their income growth slowed.
The Commerce Department said Friday that consumer spending rose 0.5 percent in June compared with May, when spending was up 0.2 percent. It was the best gain since a 0.7 percent rise in February. Income growth slowed to a 0.3 percent rise in June, weaker than May's 0.4 percent gain.
The hope is that strong consumer spending will help boost a lackluster economy to stronger growth in the second half of this year. But for that to happen, economists say income growth needs to accelerate.
Spending on non-durable goods was up 1.3 percent, reflecting in part rising gas prices, while demand for durable goods rose 0.8 percent, reflecting strength in auto sales.
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