WASHINGTON — The nation’s unemployment rate for July fell to the lowest level since the depths of the Great Recession, but that good news was tempered by a slowdown in job growth, a slight decline in the labor force, and a continuing pattern of new hires in lower-paying industries
Overall, the U.S. economy added a moderate 162,000 net new jobs in July. That was slightly below analysts’ expectations and the smallest payroll increase in four months, even after the government Friday lowered the job gains for June to 188,000 and for May to 176,000.
The weaker employment picture muddles somewhat the outlook for the expected tapering of the Federal Reserve’s monetary stimulus program.
Although most analysts still expect the Fed to reduce its $85-billion-a-month bond purchases at its mid-September meeting, the mixed report will make the job statistics next month all the more crucial in the central bank’s decision.
The fall in the jobless rate, to 7.4 percent from 7.6 percent in June, brought that figure to the lowest since December 2008. The drop was welcome and reflected gains in employment, but there were caveats that made it less rosy than at first blush.
Although more people were working last month compared with June, the ranks of part-time workers who want full-time hours edged higher.
The overall labor force — those employed or looking for jobs — declined slightly, contributing to the lower unemployment rate. And the so-called labor-force participation rate — the ratio of the overall labor force to total working-age population — fell to 63.4 percent last month, near a three-decade low.
Mark Vitner, a senior economist at Wells Fargo, saw two sides to the jobs report.
On one hand, he said, the drop in unemployment reflects how employer layoffs have receded significantly since the recession, a fact that is also borne out by the low level of unemployment claims.