New jobless figures in the United States show more jobs were created in July than expected, but not enough to reduce the unemployment rate.
US employers hired the most workers in five months, but the increase in the jobless rate to 8.3 per cent muddled the near-term outlook, the labour department said.
The new unemployment numbers annouced on Friday by the labour department painted a fresh picture of the US economy just three months before presidential elections.
US firms hired an extra 163,000 workers in July, beating economists expectations in a Reuters news agency poll for a
That snapped three straight months of job gains below 100,000 and offered hope for the struggling economy.
However, the unemployment rate rose from 8.2 per cent in June, even as more people gave up the search for work and a survey of households showed a drop in employment.
Closely watched figures
The closely watched employment report comes two days after the US central bank, the Federal Reserve, sent a stronger signal that a new round of major support could be on the way if the faltering recovery does not pick up.
Most economists had expected the Fed would launch a third round of bond purchases, possibly at its next policy meeting on September 12-13. But the mixed employment report has muddied the picture a bit.
"This is a report that doesn't give a clear read on what the Fed will do. We need to see another jobs report,"
Robert Dye, chief economist at Comerica in Dallas, said.
The Fed has held interest rates close to zero for nearly four years and pumped about $2.3tn into the economy.
The labour market slowed sharply after strong gains in the winter, spelling trouble for Barack Obama, the US president.
A recent Ipsos/Thomson Reuters poll showed 36 per cent of registered voters believe Republican presidential candidate Mitt Romney has a better plan for the economy, compared to 31 per cent who had faith in Obama's policies.
The two men are running close in most opinion polls for the November 6 election, but a survey by Pew Research Center, a Washington-based think-tank, on Thursday showed a wide gap between them, with Obama leading by 51 per cent to 41 per cent.
The unemployment rate has been stuck above 8 per cent for more than three years, the longest run since the Great
"The key question now is will it be sustained? The backdrop remains challenged, seeing anything meaningfully better than this will in itself be a challenge," Tom Porcelli, chief US economist at RBC Capital Markets in New York, said.
"We're still in an environment where productivity is slowing, where profit growth is slowing, and we don't think that
is a robust environment to see meaningful job gains."
The nationwide unemployment rate of 8.3 per cent is down from a peak under Obama of 10.1 per cent in 2009.