The U.S. economy created 209,000 jobs in July, below expectations, as the unemployment rate climbed to 6.2 percent, reflecting a consistent but unspectacular level of employment growth.
Economists expected nonfarm payroll growth to hit 233,000 in the month, down from an upwardly revised 298,000 in June, and unemployment to fall to 6.0 percent from 6.1 percent. An alternative measure of unemployment which includes the discouraged and those working part-time for economic reasons—the underemployed—rose slightly to 12.2 percent.
Traders liked the unemployment data a bit, perhaps intuiting that it would keep the Federal Reserve on hold with its ultra-easy monetary policy. Stock futures had been under selling pressure earlier after Thursday's aggressive selloff, but the market opened flat to mixed.
"That stocks should rise on the relief of a weaker than expected reading, possibly because it is a bond friendly report, suggests investors are clutching at the safety net of easier for longer Fed policy," said Andrew Wilkinson, chief market analyst at Interactive Brokers. "However, the basis of Thursday's worst day of the year was probably less centered on falling bond prices and had more to do with geopolitics and global equity price weakness. It all seems rather odd that stock futures have just about eliminated a double-digit slide ahead of the number."
Market experts said the numbers were right around the sweet spot that reflected economic growth that was solid but not strong enough to change the central bank's approach.
"It is calming fears of more aggressive hawkish Fed behavior," said Lawrence Creatura, portfolio manager at Federated Investors. "'Goldilocks' is a cliche that's been beaten to death, however, the cliche fits and this is a data point which supports the not-too-hot not-too-cold pattern of economic data."
Reversing what happened in June, most of the job creation came from full-time positions, which rose 285,000, while part-time jobs also climbed, by 52,000.
Inflationary pressures also were absent from the Bureau of Labor Statistics report, with wages rising just 1 cent to $24.,45, while the average hours worked was flat at 34.5 hours.