The U.S. economy received a rare jolt of good news this morning, when the Labor Department reported that the nation had created 163,000 jobs in July, nearly double the 90,000 increase that had been forecast. The payroll gain also was more than twice the tepid 64,000 rise tallied in June, and marked the first strong payroll increase since this past March.

The lone sour note of consequence was the report that the unemployment rate, which had been expected to hold steady at 8.2%, actually ticked up a notch to 8.3%.

Overall, the job creation number, albeit encouraging, was still not enough to eat into the elevated jobless level, which now stands at its highest point since February. However, the payroll growth, which exactly matched the private-sector gain tabulated by ADP and released on Wednesday, was encouraging and gives some hope that the unemployment rate will come down in the months ahead.

As to the various components in the report, the government also noted that private companies accounted for all of the payroll gain in the month and then some, as those jobs jumped by 172,000. Government jobs again fell, as they have been all year, with payrolls there shrinking by 9,000 in July. Some 2,000 of that decline was accounted for by lesser employment at the federal government level. All governments, whether federal, state, or local, are attempting to pare payrolls as one way of trying to close mushrooming budget deficits.

Elsewhere, the manufacturing sector added 25,000 jobs last month, while business and professional services chipped in with a gain of 49,000 payrolls. In addition, there was a 12,000 jobs increase in the health care area. Moreover, average hourly earnings ticked up by two cents in July, while the average workweek was unchanged at 34.5 hours.

Finally, the number of long-term unemployed, that is, those jobless for 27 weeks or more, held largely in place at 5.2 million. Also, the number of discouraged workers (i.e., those not activity looking for work) accounted for 852,000 of the unemployed. But that was down by 267,000 last month, which may well account for the slight rise in the jobless rate. As payroll growth quickens, it is often the case that formerly discouraged workers re-enter the job quest and are then counted as officially unemployed.

Adding it all up, this was a surprisingly good report and one that gives some hope for a better second half for the now-struggling domestic economy.      

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.