Hiring jumped in July as US employers added the most jobs in five months, alleviating some fears that the economy was sliding back towards recession.
Even though the unemployment rate ticked up a tenth of a point to 8.3 percent, economists and markets were cheered by stronger than expected job gains. Employers boosted payrolls by 163,000 jobs last month, the most since February and more than double the 64,000 added in June, the US Labor Department reported Friday.
The Dow Jones industrial average surged 217 points, closing at 13,096.
“The recovery is not great, but the economy is not collapsing,” said Jim O’Sullivan, chief US economist at High Frequency Economics, a forecasting firm in Valhalla, N.Y. “Employment is still growing, and to the extent that people have been worried about the economy downshifting, accumulating more and more weakness, this report is encouraging.”
On the campaign trail, President Obama and his Republican opponent, former Massachusetts governor Mitt Romney spoke at the same hour Friday morning, offering starkly divergent views on the job numbers and how the nation’s economy should be strengthened.
Obama continued to make the case that his policies are working, they just need time. He noted that July marked the 29th straight month of private sector job growth.
“I knew when I started in this job that this was going to take some time,” Obama said from the White House, flanked by families. “We haven’t had to come back from an economic crisis this deep or this painful since the 1930s, but we also knew if we were persistent, if we kept at it, if we kept working, we would gradually get to where we need to be.”
Romney rebuked the president for overseeing an economy that is, at best, creeping forward. He emphasized that the unemployment rate rose last month, and blamed Obama for not doing more.
“It’s another hammer blow to the struggling middle-class families of America because the president has not had policies that put American families back to work,” Romney said at a truck equipment company in Las Vegas. “I do. I’ll put them in place and get America working again.”
Job growth and unemployment statistics sometimes diverge because they are estimated from separate surveys. Job figures are based on a survey of employers, unemployment on a survey of households.
After a strong performance in the beginning of the year, the US economy slowed sharply in the spring, averaging just 73,000 new jobs a month in the three-month period that ended in June. Worries about the economic crisis in Europe and the possibility of deep federal budget cuts and significant tax hikes should Congress fail to act before the end of the year have made employers reluctant to hire, economists said.
Marisa DiNatale, an economist at Moody’s Analytics in West Chester, Pa., said she expects the US economy to keep “plodding along.” She forecast modest job growth of about 120,000 jobs a month through the end of 2012, not enough to significantly lower the unemployment rate.
“I don’t think we're going to see major improvement any time soon,” she said.
July’s national job gains were led by sectors important to the Massachusetts economy. Professional and business services, which includes technology, consulting, and scientific research firms, gained 49,000 jobs last month. Education and health services added 38,000 jobs. Manufacturing gained 25,000 jobs.
Massachusetts’ unemployment rate was 6 percent in June. The state reports July employment statistics in about two weeks.
A strong technology sector has helped boost the state’s economy. LevelUp, a Boston company that allows users to pay for goods and services using their cellphones, hired 70 people in the last two months as it has expanded in Boston and several US cities, according to Nick Herbold, a recruiter at SCVNGR, LevelUp’s parent company.
Most of the positions filled were for sales and marketing, as well as in operations and training, Herbold said. “The industry we’re in is in the midst of taking off,” he said.
But the recovery is still progressing at a painfully slow pace for millions of Americans. About 5.2 million have been unemployed for more than 27 weeks, a number that has held relatively steady for the last two months. Those individuals accounted for slightly more than 40 percent of the nation’s unemployed.
Long-term unemployment has hit older workers particularly hard. Suzanne Gray, a career coach who runs weekly workshops for unemployed workers in the Burlington area, said many are age 50 and up and have been laid off from multiple jobs.
“I hear the same stories over and over again,” she said. “The older worker may have a good phone interview but face to face, they’re not getting the job. For a certain segment, it’s still very tough out there.”