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

(Reuters) - U.S. employers in July hired the most workers in five months, but an increase in the jobless rate to 8.3 percent could keep prospects of further monetary stimulus from the Federal Reserve on the table.

Nonfarm payrolls rose 163,000 last month, the Labor Department said on Friday, snapping three straight months of job gains below 100,000 and offering hope for the ailing economy.

But the unemployment rate rose from 8.2 percent in June, even as more people gave up the search for work and a survey of households showed a drop in employment.

"As long as the unemployment rate is high, the central bank will have to consider further stimulus," said Sung Won Sohn, an economics professor at California State University Channel Islands in Camarillo, California.

The Federal Reserve on Wednesday sent a stronger signal that a new round of major support could be on the way if the recovery did not pick up. The labor market has slowed after hefty gains in the winter, spelling trouble for President Barack Obama.

By Lucia Mutikani
Read More: Reuters