WASHINGTON (AP) — U.S. employers added 163,000 jobs in July, a hopeful sign after three months of sluggish hiring.
The Labor Department said Friday that the unemployment rate rose to 8.3 percent from 8.2 percent in June.
July's hiring was the best since February. Still, the economy has added an average of 151,000 jobs a month this year — enough to keep up with population growth but not enough to drive down the unemployment rate.
"After a string of disappointing economic reports ... we'll certainly take it," said James Marple, senior economist at TD Economics.
Stocks rose sharply in early trading. The Dow Jones industrial average added 219 points to 13,098, while the broader Standard & Poor's 500 index rose 125 points to 1,390.
The government uses two surveys to measure employment. A survey of businesses showed job gains. The unemployment rate comes from a survey of households and is calculated by dividing the number of unemployed people by the size of the labor force. In July, more people said they were unemployed, while the size of the labor force shrank even more.
Economists say the business survey is more reliable.
Stronger job creation could help President Barack Obama's re-election hopes. Still, the unemployment rate has been above 8 percent since his first month in office — the longest stretch on record. No president since World War II has faced re-election with unemployment over 8 percent.
A better outlook on hiring could make the Federal Reserve reluctant to take more action to spur growth. The Fed, which ended a two-day policy meeting Wednesday, signaled in a statement a growing inclination to take further steps if hiring doesn't pick up.
But some economists say the job gains need to be greater.
Paul Ashworth, senior U.S. economist for Capital Economics, said July's job gains were a "vast improvement" over the past four months. Still, they were well below the average 252,000 jobs a month added from December through February.
"It also isn't strong enough to drive the unemployment rate lower, which is what the Fed really wants to see. So, on balance, we doubt this would be enough to persuade the Fed to hold fire in September," Ashworth said.
The job gains were broad-based. Manufacturing added 25,000 jobs, the most since March. Restaurants and bars added 29,000. Retailers hired 7,000 more workers. Education and health services gained 38,000. Governments cut 9,000 positions.
Average hourly wages also increased by 2 cents to $23.52 an hour. Over the past year wages have increased 1.7 percent — matching the rate of inflation.
Despite July's gains, the economy remains weak more than three years after economists declared the recession had ended in June 2009. Growth slowed to an annual rate of 1.5 percent in the April-June quarter, down from 2 percent in the first quarter and 4.1 percent in the final three months of 2011.
Manufacturing activity shrank for the second straight month in July, a private survey said Wednesday. Consumer confidence improved slightly last month but remains weak.
Rising pessimism about the future is taking a toll on businesses and consumers, many economists say. Europe's financial crisis has weakened that region's economy, hurting U.S. exports. Worries have also intensified that the U.S. economy will fall off a "fiscal cliff" at the end of the year. That's when tax increases and deep spending cuts will take effect unless Congress reaches a budget deal. A recession could follow, Fed Chairman Ben Bernanke has warned.
Americans are responding by spending less and saving more. A big reason growth slowed in the second quarter was that consumer spending, which accounts for roughly 70 percent of economic activity, slowed to an annual growth rate of 1.5 percent. That was down from 2.4 percent in the first quarter.
Copyright 2012 The Associated Press.
San Diego Fire-Rescue Department officials are increasing staffing levels in anticipation of increased fire activity.
It was a hopping good time in Balboa Park on Sunday at the 8th annual Bunnyfest. Hundreds joined the San Diego House Rabbit Society for a big playdate that's all for a good cause. The money raised Sunday will go towards helping the rabbit society find loving homes for their adoptable bunnies.
An early morning vegetation and trash fire at a homeless encampment threatened nearby condos and resulted in at least one injury Sunday.
A major construction project at the San Ysidro Land Port of Entry will be completed ahead of schedule, officials said Sunday.
After a fall-like and mild weekend, temperatures are expected to heat up around San Diego throughout the week.
The city's search for the next top cop is underway as police chief Shelly Zimmerman prepares to step down in March.
More than 200 surfers paddled out for a daunting day-long challenge Saturday inspired by young men in the community facing a far bigger one.
A semi-truck ran over a fire hydrant Saturday afternoon in Grant Hill causing a huge geyser to spray into the air. Luckily, firefighters were just minutes away at a community event and were able to put a stop to the water quickly.