Stock market jumps at news that economy added 163,000 jobs in July

Wall Street reacts with glee to higher-then-expected job growth in July, led by the auto sector and restaurants. But for the millions of jobless, the key figure in Friday's report may be the unemployment rate, which ticked up to 8.3 percent.

By Ron Scherer,?Staff writer / August 3, 2012

Specialists Mario Picone (l.) and Robert Nelson (c.) work at their posts on the floor of the New York Stock Exchange on Friday. US stocks took off on Wall Street after a July jobs report revealed the strongest hiring in five months.

Richard Drew/AP

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The US economy showed a little more spunk in July, as more people found jobs than in May and June. But the midsummer improvement was relatively modest, not a full-fledged jobs festival.

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The US economy added 163,000 jobs, which was 100,000 more than the prior month, the Bureau of Labor Statistics reported Friday.?The unemployment rate ticked up to 8.3 percent from 8.2 percent in June.

For the first seven months of the year, the economy has averaged a gain of 150,000 jobs. This is just enough to find jobs for new people entering the labor market but not enough to give a boost to the millions of people who have been out of work for an extended period of time.

"This kind of job growth would be totally fine if we were at full employment,? says Heidi Shierholz, an economist at the Economic Policy Institute, a think tank in Washington. ?But it is not what we need given the jobs deficit we have.?

The jobs numbers are a flash point in the fall election campaign. The Republicans immediately pointed to the 8.3 percent unemployment report as an indication that the Obama economic policies are not working. The Democrats said the numbers indicate that the economy is starting to shake off its second-quarter malaise. They blamed Republicans for obstructing legislation that might aid the economy.

The July numbers might also have some implications for the Federal Reserve, which met this week and decided not to make any changes to monetary policy. However, the Fed indicated it was watching the economic data and might initiate a new round of stimulus if the economy were to slide.

?These numbers will push them back on their heels again,? says Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.

Although the better numbers were relatively modest, Wall Street traders were buoyed. As of 11:40 a.m., the Dow Jones Industrial Average was up 244 points to 13122, or up almost 2 percent on the day.

Source: http://rss.csmonitor.com/~r/feeds/wam/~3/K3yJ2ByNsc8/Stock-market-jumps-at-news-that-economy-added-163-000-jobs-in-July

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