The US economy generated a higher-than-expected 117,000 jobs in July, cutting the unemployment rate to 9.1 percent and giving hopes that the economy has not stalled, the Labor Department said Friday. The department also sharply revised upward the data for the previous two months, which had originally raised concerns that the economy had flat-lined.
The better-than-expected numbers came after markets worldwide plunged on worries that the data would show the US economy headed into stagnation.
The private sector generated 154,000 jobs in July, easily offsetting a loss of 37,000 positions in the public sector — many of which came from sweeping layoffs in the state of Minnesota as the government shut down due to a political fight over spending and union benefits.
On average, economists had forecast only a net 84,000 jobs generated. “Job gains occurred in health care, retail trade, manufacturing and mining,” the department said. “The decline was almost entirely due to the partial government shutdown in Minnesota.”
The Labour Department revised the figures for June to 46,000 net jobs (from the original 25,000 estimate) and for May, 53,000 (from 18,000).
Though much brighter than before, the three-month average remains well below the estimated 100,000 needed just to accommodate new entrants to the workforce to meet the growing population — much less to cut the overall official number of 14.1 million Americans without jobs.
The reeling global markets were closely watching the US jobs data, with Asian stocks plummeting Friday a day after the Dow Jones Industrial Average suffered its worst one-day drop since December 2008, shaking already brittle investor confidence.
European stocks were mixed ahead of the data and mostly jumped after the labor data release. US stock futures also jumped ahead of the 1330 GMT markets opening.
Fears were that even more negative economic data from the world’s largest economy could prompt further losses.
Figures released in recent weeks mostly point to the US economy having stagnated over the past two months, and suggest businesses have been hesitant to hire while the government was locked in a political battle over long-term economic policy and the debt ceiling.
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