WASHINGTON _ The U.S. economy added a surprisingly robust 255,000 net jobs in July and wages showed strong gains, the Labor Department said Friday, easing fears the labor market was stumbling seven years into the recovery from the Great Recession.
The unemployment rate held steady at 4.9 percent, near an eight-year low, as the labor force expanded by about 407,000 people in a sign that Americans see improved job prospects.
Average hourly earnings jumped 8 cents to $25.69 in July, much better than the 2-cent rise the previous month. For the year ended July 31, wages have increased 2.6 percent, well above the low inflation rate.
The job growth last month was down from an upwardly revised 292,000 in June. But economists had expected a much steeper fall-off, to 185,000, after the best monthly performance since 2014.
The strong back-to-back months of job gains came after a severe slowdown in May, when the economy added just 24,000 net positions. That number was revised up Friday from 11,000, but still was the weakest month of job growth since 2010.
Analysts and Federal Reserve policymakers said they thought the May figures were just an anomaly, driven in part by a major strike by Verizon workers. July's strong job gains, on the heels of June's, appear to confirm that, which is welcome news given weak overall economic growth so far this year.
Even with May's slowdown, job growth has averaged 190,000 over the last three months. That compares favorably to the 206,000 average for the 12 months ended July 31.
The biggest job gains last month were by business and professional services companies, which increased their payrolls by 70,000, up from 53,000 in June. The construction industry added 14,000 net jobs in July after shedding 3,000 the previous month.
But manufacturing hiring slowed, with a gain of 9,000 net jobs last month, down from 15,000 in June.
Fed officials are watching the labor market closely to determine if the economy is ready for another small increase in a key interest rate.
Fed officials held off on a rate hike in June partly because of the surprisingly weak job growth the previous month, in addition to concerns about the referendum in which Britain decided to leave the European Union.
The vote took place just days after the Fed's June meeting and the victory by the "leave" campaign roiled financial markets for a couple of weeks.
Meanwhile, although job gains rebounded strongly in June, overall economic growth disappointed. An anemic 1.2 percent annual growth rate from April through June after a weak winter has raised new concerns about the strength of the recovery.
