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Employers add 162,000 jobs, rate falls to 7.4 percent

James Knox
Clarence Mason of Oak Hill sits in the Pennsylvania CareerLinks downtown offices Friday August 2, 2013 is looking for employment.

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By Thomas Olson
Friday, Aug. 2, 2013, 8:42 a.m.

Gradual improvement in the nation's economy is not enough for Clarence Mason of the Hill District.

Jobs grew at a disappointing pace in July, the government said on Friday, adding just 162,000 jobs — far fewer than the 185,000 most economists had expected. Other elements of the Labor Department report were more encouraging.

The nation's unemployment rate fell 0.2 percentage points to a 4 12-year low of 7.4 percent last month. But the government report revised employment gains for May and June downward by 26,000 jobs.

“Right now, I'm getting desperate. I'm even applying for dishwasher jobs,” said Mason, 59, as he searched for work online at a career center Downtown.

“There are jobs out there, but I'm finding lesser-paying ones,” Mason said. He has been without work since losing his bookkeeping job at a South Side hotel in June.

“That plays into the take-away that this report leaves something to be desired,” said Mark Hamrick, an economic analyst at in Washington. “At a time when we're praying for acceleration in the economy, we're just not getting that.”

For instance, the average employee's work week decreased in July, as did average hourly wages. That will slow consumer spending and signals lukewarm economic growth.

More encouraging was the number of unemployed people dropped by 263,000 last month to 11.5 million. Plus, the 7.4 percent jobless rate has not been at that low a level since December 2008.

“The general trend is in the right direction,” said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.

“Unemployment had peaked at 10 percent in October 2009. So it's fallen by 2.6 percentage points since then,” Faucher said.

The jobless rate for the seven-county Pittsburgh region stood at 6.8 percent in June, the latest data available, equaling the rate in March 2009. The June rate here compared with 6.9 percent in May and 7.2 percent in June 2012.

The national jobs report was not strong enough to lead the Federal Reserve to stop trying to stimulate more economic growth, Faucher said. The Fed has been buying $85 billion a month in securities to pump money into the economy and keep interest rates low.

“The July report reduces the likelihood the Fed will tighten (the money supply) in September, which most people had been expecting,” Faucher said.

Another reason the unemployment rate fell in July was a drop in the labor force. About 37,000 people last month decided not to actively look for a job. When people stop looking for work, they are no longer counted as part of the labor force, which artificially lowers the unemployment rate.

“That 37,000 is a relatively small number,” said Faucher. “But if it's repeated in August, it would be a bit more worrisome.”

Employment gains in July were led by 47,000 jobs added in retail and 38,000 jobs in food services and drinking places.

“Improvement in retail and bars and restaurants is fine for those people that want to work there, but these are not jobs you write home to brag about,” said Hamrick of

Manufacturing employment grew by a scant 6,000 last month, although it was the sector's first increase since February. Employment grew mainly because of strong gains in the auto industry, which in July posted their best sales in about four years.

The manufacturing sector has regained only 515,000 of the 2.29 million jobs lost during the Great Recession, according to the U.S. Business and Industry Council.

Employment in professional and business services increased by 36,000, said the labor report. Securities and investment jobs grew by 15,000.

Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at

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