Jobs increase in July, but jobless rate rises to 8.3 percent

WASHINGTON, Fri Aug 3, 2012 – Employers in July hired the most workers in five months, but an increase in the jobless rate to 8.3 percent will probably keep expectations of additional monetary stimulus from the Federal Reserve intact.

Nonfarm payrolls rose 163,000 last month, the Labor Department said on Friday, beating economists expectations for a 100,000 gain. The report was dimmed somewhat by the increase in the jobless rate from 8.2 percent in June, even as more people gave up the search for work.

In addition, employment for May and June was revised to show 6,000 fewer jobs created than previously reported.

The closely watched employment report comes two days after the U.S. central bank sent a stronger signal that a new round of major support could be on the way if the faltering recovery does not pick up.

Most economists expect the Fed will launch a third round of bond purchases, possibly at its next policy meeting on Sept. 12-13.

That’s despite the approach of the U.S. presidential and congressional elections in November, which could leave the central bank open to criticisms from Republicans who have made the weak economy a centerpiece of their campaigning.