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WASHINGTON - A sluggish U.S. economy cost American workers another 42,000 jobs in July, but the unemployment rate held steady at 4.5 percent, the government reported Friday.
"The unemployment numbers were not as bad as we thought so it does speak to a period of stability," U.S. Department of Labor Secretary Elaine Chao said shortly after her department issued the monthly report, one of the first indicators of third-quarter activity.
July was the second straight month of jobs decline, adding to 93,000 lost in June. Still, the June figure was a revision from an earlier estimate that an even larger 114,000 jobs were lost in June and the department also said that 41,000 jobs were created in May instead of only 8,000.
Another 49,000 manufacturing jobs were lost in July - continuing a year-long slide in this sector and bringing the total job loss to 837,000 during the past year..
Service-producing industries like retail businesses eked out a small job-creation gain of 5,000 in July, the weakest showing since August 2000 and sharply less than the 33,000 new jobs in June and a robust 138,000 in May.
Construction employment was little changed in July following a decline the month before. Monthly job growth has averaged 11,000 so far this year compared with 18,000 per month in 2000.
The report showed a small pickup in average hourly earnings, up four cents to $14.35 in July.
To avert a recession, the Federal Reserve has cut interest rates six times this year, totaling 2.75 percentage points. The most recent cut was by a quarter percentage point on June 27, which brought the Fed’s benchmark federal funds rate to 3.75 percent, the lowest in more than seven years. Many analysts believe the Fed will order another rate reduction at its next meeting Aug. 21.