The American economy has added the lowest number of jobs for five months, increasing payrolls by just 92,000. The 4.6% unemployment rate in July was the highest since January.
The Department of Labor figures disappointed the market, which had been looking for more than 130,000 new jobs.  Some analysts said the figures were better than initial reports suggested, noting that 120,000 jobs were created in the private sector, especially in service industries. Government jobs fell by 28,000.

However the US Labor Department also revised down its estimates for job creation in each of the two prior months by a total of 8,000.  It means that in the first seven months of 2007, average job growth has eased to 136,000 per month from a more vigorous 189,000 in 2006.

Economists warned against panic, suggesting that economic growth was picking up as the year progressed and the economy was not poised to fall into recession.

“It’s moderately softer but it’s not enough to change the overall trend of the economy,” said Pierre Ellis, senior global economist with Decision Economics. “The start of the third quarter remains relatively healthy.”

The US economy grew by 3.4% in the three months to June, faster than expected, but other economic indicators measuring consumer spending and house building have been disappointing.