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The US Labor Department has announced that the country’s economy added 162,000 new jobs in July.

The figure – which measures the number of jobs outside the US farming sector – was below economists’ expectations of more than 180,000 and the government also cut its previous estimates for hiring in May and June.

Nonetheless, the new jobs helped the unemployment rate to fall to 7.4%.

That was down from 7.6% and is the lowest jobless rate in four years.

The news adds to the picture of a slowly growing US economy and may make its central bank more likely to end its monetary stimulus programme.

The Federal Reserve is currently buying $85 billion a month in bonds which helps to keep borrowing costs low.

However, there is much speculation as to when the Fed will start to rein in this stimulus programme.

US economy added 162,000 new jobs in July

US economy added 162,000 new jobs in July

Its chairman, Ben Bernanke, has said that it might start cutting down the rate of bond buying by the end of the year and stop altogether by the middle of 2014, depending on the strength of the economy.

Earlier this week, figures showed that the US economy grew at a faster-than-expected annualized pace of 1.7% in the second quarter of the year.

That was up from the growth rate for the first three months of 2013, which was revised lower to 1.1% from 1.8%.

Gordon Charlop, of Rosenblatt Securities said the figures were moderately encouraging: “The idea that the unemployment dropped at all, went below 7.6%, is showing that the trend is going the right way.

“We’re sort of grinding along here. We’re not surging. I don’t think there’s anything here that will cause the Fed to do anything significant.”

Revisions to previous months’ data saw May’s jobs increase downgraded to 176,000, below the 195,000 previously estimated, while June’s increase was lowered to 188,000, from the 195,000 originally reported.

Paul Ashworth, chief economist at Capital Economics, said despite that, the employment picture was much brighter than last year: “While July itself was a bit disappointing, the Fed will be looking at the cumulative improvement.

“On that score, the unemployment rate has fallen from 8.1% last August, to 7.4% this July, which is a significant improvement.”

Other figures released on Friday confirmed the picture of moderate economic growth.

US consumer spending and inflation both rose in June, with the US Commerce Department saying spending was 0.5% higher and annual inflation running at 1.3% – although that is still well below the US target of 2%.

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US economy has added 157,000 jobs in January 2013, which was slightly below forecasts, but the number of new jobs at the end of 2012 was revised up significantly, official data has shown.

In November and December, the Labor Department’s revised figures showed that 127,000 more jobs were created than initially thought.

But the unemployment rate ticked up to 7.9% in January, from 7.8% in December.

In 2012, an average of 181,000 jobs a month were created, the data showed.

The news helped lift shares on Wall Street to levels not seen since before the financial crisis. In early trading the Dow Jones index rose above 14,000 for the first time since October 2007.

The unemployment rate is based on a survey of households, while the job creation figure is taken from a survey of employers.

On Wednesday, government data indicated that the US economy unexpectedly shrank at an annualized rate of 0.1% in the fourth quarter of 2012.

Meanwhile, an industry survey on Friday said that the US manufacturing sector grew in January at the fastest pace for nine months.

The latest purchasing managers’ index from financial data firm Markit rose to 55.8 last month, up from 54 in December. A reading above 50 indicates growth.

US economy has added 157,000 jobs in January 2013, which was slightly below forecasts

US economy has added 157,000 jobs in January 2013, which was slightly below forecasts

Markit said that its latest survey “suggests the underlying health of the industrial sector continues to improve, and rising production will help the economy return to growth in the first quarter, provided there are no set-backs in coming months”.

The Labor Department said that in January, jobs were created in retail, construction, healthcare and wholesale trade, but jobs were lost in transportation and warehousing.

Employment in retail rose by 33,000, compared with an average monthly gain of 20,000 in 2012.

Employment in construction rose by 28,000. The Labor Department said that the industry had created 296,000 jobs since falling to a low in January 2011, but added that the current level of employment was still some two million below its previous peak in April 2006.

Healthcare added 23,000 jobs in January, while wholesale trade added 15,000.

There was little change in manufacturing employment, which has been essentially flat since July 2012.

On the downside, couriers and messengers lost 19,000 jobs, after strong seasonal hiring in November and December came to an end.

Darrell Cronk, regional chief investment officer for Wells Fargo Private Bank in New York, said: “Like most of our jobs reports, it seems like every month, there is something for everybody in this one – there are positives and negatives.

“It was certainly below expectations and a slight negative that we saw a tick up in the unemployment rate from 7.8% to 7.9%, especially with the labour force participation rate staying where it is, which suggests there aren’t a vast influx of those unemployed/underemployed coming back being job seekers. That was disappointing.”