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US employers add 162K jobs; rate falls to 7.4 pct.

By Christopher S. Rugaber

Associated Press

Published: Friday, Aug. 2 2013 2:39 p.m. MDT

More than half of July's job gain came from lower-paying industries, extending a trend that is limiting Americans' incomes and possibly slowing consumer spending. Retailers, for example, added nearly 47,000 jobs — the biggest gain for any industry last month. Restaurants and bars added 38,400.

One Atlanta-based retailer, Cellairis, which sells mobile phone accessories, says it hired about 75 employees last month to meet growing demand. The company has 650 U.S. outlets, nearly all of them mall kiosks. It plans to add 45 walk-in stores this year.

"People are willing to spend more now to protect and personalize their devices," said CEO Taki Skouras.

By contrast, employers in higher-paying industries, like Stripmatic, a steel parts maker in Cleveland, remain wary. Stripmatic hasn't hired anyone since adding five workers in the first three months of the year. Revenue has been 10 percent below projections this year.

The company's exports have picked up a bit in Mexico and Brazil but remain flat in Asia. Company President Bill Adler says he's concerned that slower growth in China could hamper his overseas sales this year.

Low-paying industries have accounted for 61 percent of jobs added this year, even though they represent only 39 percent of U.S. jobs overall, according to Labor Department numbers analyzed by Moody's Analytics. Mid-paying industries have accounted for fewer than 22 percent of the jobs added.

Some job gains were made in higher-paying fields last month. Financial services, which includes banking, real estate and insurance, added 15,000. Information technology added 4,300, accounting 2,500. And manufacturing added 6,000 jobs, though that figure was offset by an equivalent loss in construction.

One growing source of better-paying jobs is local governments. They've now added jobs for five straight months and have helped offset job cuts by state and federal governments.

The result is that governments overall are much less of a drag on hiring than they were earlier in the economic recovery. All told, they've shed 39,000 jobs in the 12 months that ended in July. That's down from a loss of 137,000 in the 12 months that ended in July 2012.

Most of the hiring by local governments has been for teachers and other jobs related to education. Local property tax revenue, a key source of funding for counties and cities, fell after the recession but has begun to recover in some communities. Nationwide, home prices have risen steadily, a trend that typically leads to higher property tax revenue.

More broadly, many of the jobs added in July are only part time. The number of Americans who said they were working part time but would prefer full-time work stands at 8.2 million — the highest since last fall. Part-time jobs account for 65 percent of the jobs added in July and 77 percent of those added this year.

The percentage of Americans either working or actively looking for work dipped in July to 63.4 percent. This is called the "labor force participation rate." The participation rate has been generally declining since peaking at 67.3 percent in 2000. That's partly the result of baby boomers retiring and leaving the workforce.

Job gains are being slowed by the economy's tepid growth. It grew at an annual rate of just 1.7 percent in the April-June quarter, the government said this week. That was an improvement over the previous two quarters, but it's still far too weak to rapidly lower unemployment.

Recent data suggest that the economy could strengthen in the second half of the year. The housing market is rebounding. Factories increased production and received a surge of orders in July, propelling the fastest expansion in more than two years.

Businesses have ordered more equipment for four straight months. Europe's troubled economies are showing signs of recovery, potentially a lift to U.S. exports.

U.S. automakers are reporting their best sales since the recession, a sign that Americans are confident enough in their finances to make large purchases. Car sales rose 14 percent in July from 12 months earlier to 1.3 million.

AP Economics Writers Paul Wiseman and Martin Crutsinger contributed to this report. Follow Christopher S. Rugaber at http://twitter.com/ChrisRugaber .

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