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US jobless rate falls to 4-year low

Employers slowed their pace of hiring in July but jobless rate fell anyway with two tenths of a point to 7.4 percent.

Last Modified: 02 Aug 2013 13:34
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Economic growth remains sluggish as the the economy grew at a 1.7 percent annual rate in April-June quarter [EPA]

US employers slowed their pace of hiring in July but the jobless rate fell anyway, mixed signals that could make the US Federal Reserve more cautious about drawing down its huge economic stimulus programme.

The number of jobs outside the farming sector increased by 162,000, the Labor Department said on Friday.

That was below the median forecast in a Reuters news agency poll of 184,000. Compounding that miss, the government also cut its previous estimates for hiring in May and June.

At the same time, the jobless rate fell two tenths of a point to 7.4 percent, its lowest in over four years.

Americans worked fewer hour and their pay dipped. The figures suggested weak economic growth may be making businesses cautious about hiring.

Reaction to the jobs report on financial markets was slightly negative.

Stock index futures gave up early gains and were little changed shortly after the report came out.

The job gains were mostly in lower-paying industries, such as retail, hotels and restaurants. But some positions were added in better-paying areas.

Manufacturing added 6,000 jobs, driven by strong gains at auto plants. Those were the first job gains at US factories since February.

Economic growth remains sluggish. The economy grew at a 1.7 percent annual rate in April-June quarter, the government said on Wednesday. While that was an improvement over the previous two quarters, it is still far too weak to rapidly lower unemployment.

Recent data suggest that the economy could strengthen in the second half of the year.

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