The US economy created a solid 163,000 jobs in July, the Labor Department said Friday, helping President Barack Obama dull attacks from his Republican rival as the White House race intensifies.
Although the unemployment rate ticked up to 8.3 percent, the economy created many more jobs than expected, providing evidence that the world's largest economy is still on track.
"Finally, we have some good news on the employment front," said Nigel Gault, an economist with IHS Global Insight. "The report will alleviate fears that the US might be tipping back into recession."
Wall Street analysts had predicted the economy created 100,000 jobs during July.
The service, manufacturing, and food and drink sectors were among those showing gains, as the economy created more jobs than at any time since February.
With fewer than 100 days to go until the US presidential election, White House contenders seized on the report's seemingly mixed message in order to shape the tone of the debate.
Republican Mitt Romney zeroed in on the politically symbolic unemployment rate, which at 8.3 percent was the highest since February.
"Today's increase in the unemployment rate is a hammer blow to struggling middle-class families," Romney said in a statement, as he pledged to create 12 million jobs in his first term.
"We've now gone 42 consecutive months with the unemployment rate above eight percent. Middle-class Americans deserve better, and I believe America can do better."
The unemployment rate and the job creation figures are taken from two separate Labor Department surveys.
The rate is compiled through a survey of 60,000 households, while the payrolls increase comes from a poll of 140,000 businesses and government agencies.
The number of jobs created in July may make it difficult for Romney to steer the debate back onto the economy and away from issues that have seen him drop in the polls.
The last month has seen Romney criticized for not releasing more tax returns, for diplomatic missteps, for his dealings at Bain Capital and his tax plan -- which independent analysts said would raise rates for the middle class.
That has resulted in Obama opening up a two-point lead in national tracking polls as he pulls away in key swing states like Florida, Ohio and Pennsylvania, leaving Romney with plenty to do if the election is not to slip through his fingers.
The White House said the report provided "further evidence that the US economy is continuing to recover from the worst downturn since the Great Depression."
Democrats will also take hope from the fact that unemployment among Hispanics fell 0.7 points to 10.3 percent and the rate for adult women stood basically unchanged at 7.5 percent -- both groups are crucial for Obama to win the election.
Obama's top economic adviser Alan Krueger echoed the Labor Department's observation that the unemployment rate was "essentially unchanged."
"The rate rose from 8.217 percent in June to 8.254 percent in July," well within the report's margin of error, he said.
US markets swept aside the slight uptick in unemployment.
The Dow Jones Industrial Average surged 1.6 percent or 209 points while the government's cost of borrowing fell.
Friday's data is unlikely to be instrumental in deciding whether the Federal Reserve embarks on a new round of stimulus spending.
Before the Fed meets in September policymakers will receive August's jobs report.
- Barack Obama