The US economy added 209,000 jobs in July bringing the unemployment rate to 6.2%, latest data from the Bureau of Labor Statistics has shown.
The biggest job gains were in professional business services and manufacturing jobs.
On Wednesday, the Commerce Department said the US economy grew by a better-than-expected 4% during the April-to-June period.
In an encouraging sign, the number of people in the US labor market increased slightly, meaning that workers who may have given up looking for a job have now begun to re-enter the jobs market.
The May and June jobs data were also revised upwards to show that the US economy added 15,000 more jobs.
Some economists had been expecting even larger figures, and US stock markets were down on the less-than-expected gains.
The Dow dropped nearly 80 points, following steep losses the day before.
Nonetheless, most analysts agreed that there was nothing obviously negative about the report.
July is often one of the weaker months for jobs growth, which is one possible reason for the uptick in the unemployment rate.
However, the figures are encouraging, as the US economy needs to add at least 150,000 jobs each month simply to keep up with population growth.
This is the sixth straight month that the US economy has added more than 200,000 jobs.
Yet there are still reasons to be concerned: wage growth remains flat and the number of long-term unemployed – those out of work for longer than six months – was essentially unchanged at 3.2 million, or a third of those looking for work.
US Federal Reserve chair Janet Yellen recently highlighted that while the employment data is certain better than in the aftermath of the 2008-2009 recession, challenges remain.
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