Washington, August 6 -- U.S. employers added only 32,000 workers to payrolls last month, the government said on Friday in a report far weaker than expected, according to Reuters..
The Labor Department also cut its tally of job growth for May and June by a combined 61,000.
The unemployment rate, however, fell to 5.5 percent from 5.6 percent in June as a separate government survey of households showed robust employment growth. The department cautioned that the household survey was a less reliable barometer of month-to-month changes in employment than its larger survey of businesses.
Wall Street economists polled last week had looked for a payroll gain of 228,000, although a weak employment reading from a service sector survey on Wednesday had some bracing for a weaker number. Still, the lackluster July figure was certain to surprise.
The Bush administration was likely to look on the bright side as the report showed 1.5 million jobs have been created in 11 straight months of hiring gains. However, Democratic White House hopeful John Kerry could accurately claim that the economy is still down 1.1 million jobs since Bush took office, despite the recent gains.
The report will also raise questions about how successfully the economy shook off a soft patch in June and may lead financial market participants to reassess the pace of rate rises expected over the coming months from the Federal Reserve.
Fed officials gather next Tuesday to plot interest rate strategy and are expected to add to a quarter-point interest-rate increase made in June.
