Total nonfarm payroll employment declined by 131,000 in July and the enemployment rate was unchanged at 9.5 per cent, the Unite States Bureau of Labour Statistics (BLS) has reported.

In worrying news for the Obama administration, as it heads towards November Congressional elections, the BLS added that federal government employment dropped sharply, as 143,000 temporary workers recruited for the decennial census completed their work. Private-sector payroll employment however crept up by 71,000.

Even as the White House has sought to bring job creation to the top of its agenda after the Wall Street reform bill was passed last month, the July unemployment numbers suggested improvements in job market conditions had flatlined.

In particular the BLS figures suggested that the numbers of those jobless for 27 weeks and over was little changed at 6.6 million and the numbers of those employed part-time for economic reasons – referred to as involuntary part-time workers – was essentially unchanged over the month at 8.5 million.

Manufacturing employment was one of the few areas that showed an uptick, with job numbers increasing by 36,000 over July. The BLS said that motor vehicles and parts had fewer seasonal layoffs than normal for July, and this had contributed to a seasonally adjusted employment increase of 21,000. Other sectors such as mining, fabricated metals, transportation and warehousing and health care also added jobs.

However there was more bad news for employment in financial activities, which continued to show a negative trend in July. Jobs in this sector declined by 17,000, bringing the average monthly job loss figure in the industry to 12,000. The agency added that employment in other private-sector industries, including wholesale trade, retail trade, information, and leisure and hospitality showed little change in July.

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