U.S. Adds 162,000 Jobs as Growth Remains Sluggish

The unemployment rate, which comes from a different survey, gave a more encouraging signal, edging down to 7.4 percent from 7.6 percent in June. But the improvement was only partly a result of more people getting jobs. More people also dropped out of the labor force. The unemployment rate refers only to people who are actively looking for work.

While the jobs report was lackluster, particularly compared to expectations that the economy might add closer to 200,000 jobs, many economists said the latest data was unlikely, on its own, to cause Federal Reserve officials to back away from plans to begin easing its stimulus policies. Ben S. Bernanke, chairman of the Fed, has said that the central bank would start reducing its monthly purchases of Treasuries and mortgage-backed securities “later this year.” Many Wall Street analysts have interpreted that comment as pointing to action as early as the Fed’s meeting in September.

“The payroll numbers were a little disappointing, but the Fed has said it’s more interested in the unemployment rate than the payroll numbers,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He noted that the Fed’s own forecasts put the unemployment rate around 7.2 to 7.3 percent at the end of this year, not far below the July level. Referring to inflation, he said, “If anything, today’s numbers would harden my view if I were a hawk and persuade me to become more hawkish if I were wavering.”

Not everyone agreed with that view, with several analysts suggesting the Fed might wait until December to take its first step. The mixed signals from July’s jobs report will most likely focus even more attention on August’s jobs snapshot, the last before the Fed’s next meeting, scheduled for the middle of September.

“The committee needs to see more data on macroeconomic performance for the second half of 2013 before making a judgment on this matter,” James Bullard, president of the Federal Reserve Bank of St. Louis and one of the members of the Fed committee that sets interest rates who is more dovish on inflation, said in a speech on Friday.

Other indicators also painted a somewhat darker picture of the economy and the job market than was evident from reports earlier this year, with both average hourly wages and the length of the private sector workweek shrinking modestly in July. The job gains reported on Friday were concentrated in retail, food services, financial activities and wholesale trade, according to the Labor Department. Manufacturing gained 6,000 jobs, the first improvement since February, although economists caution that the timing of auto plant shutdowns in the summer can distort the numbers.

July represented the 34th consecutive month of job creation, but the latest pace of employment gains is still far below what would be needed to absorb the backlog of unemployed workers anytime soon. At the roughly 192,000-a-month average rate of job growth so far this year, it would take more than seven years to close the so-called jobs gap left by the recession, according to the Hamilton Project at the Brookings Institution. There are now 11.5 million Americans looking for work who cannot find it. That figure nearly doubles when two other groups of “underemployed” workers are taken into account: people who want to work but have stopped looking, and people who are working part time because they cannot secure full-time jobs. The number of Americans in so-called involuntary part-time employment has barely budged in recent years, and the total for July 2013 was exactly the same as a year earlier.

For these unemployed and underemployed workers, the social safety net that has been supporting them has frayed as a result of federal, state and local budget cuts.

“I honestly didn’t think it would be this hard,” said Keith Aiken, 38, who moved into a homeless shelter in Greensboro, N.C., about a month ago. His employer of more than a decade, a group home for people with disabilities, shut down last August, and he has been looking for work ever since.

After state officials ended North Carolina’s eligibility for federal unemployment benefits last month, Mr. Aiken’s benefits stopped and he was no longer able to pay his rent.

“Hopefully, something will come open pretty soon,” he said, noting that he was looking into contract labor in Iraq or Afghanistan. “I like to think I’m down but not quite out yet.”

The outlook for hiring is unclear, particularly since even the moderate rates of job growth in recent months do not seem justified by the weak gains in economic output. The nation’s gross domestic product grew at an annual rate of 1.7 percent in the second quarter and 1.1 percent in the first quarter, much slower than would be predicted from recent hiring trends.

Economic output and job growth seem unlikely to stay decoupled for too long, some economists say, in which case output growth should start to pick up, or job growth should start to slow, or both.

“I think with the economy showing 1 percent growth on average over the last three quarters, you’re locked into 150,000 jobs per month for the rest of this year,” said Steven Ricchiuto, chief United States economist at Mizuho Securities.

One other possible explanation for the seemingly incongruous trends in job and output growth is the mix of jobs being created.

“It’s a lot of temp services, retail, food services, health care,” said Joshua Shapiro, chief United States economist at MFR Inc.

“With low-end jobs contributing more than half the growth, the income generated would be not that great, and you wouldn’t be expecting it to drive strong consumer spending.”

Nelson D. Schwartz and Binyamin Appelbaum contributed reporting.

Media Decoder: Hollywood’s Passion for Guns Remains Undimmed

As the blockbuster film season unfolds, every major studio has firearms of one sort or another in its marketing arsenal. At Sony Pictures Entertainment, Channing Tatum clutches a sidearm the size of Wyatt Earp’s as he walks Jamie Foxx to safety on the poster for “White House Down.”

At Paramount Pictures, Brad Pitt, zombie hunter, has an even bigger piece of personal artillery slung across his back in the promotional art for “World War Z.”

Johnny Depp packs a pistol in his pants on the poster for Disney’s “The Lone Ranger.” Melissa McCarthy grips what appears to be a full-blown grenade launcher in the advertisements for 20th Century Fox’s “The Heat.”

The glowing handguns on the art for Universal’s “R.I.P.D.” have a preternatural look; but what really gets your attention are those chillingly real guns being flashed by Denzel Washington and Mark Wahlberg, standing back to back, on the poster for the same studio’s “2 Guns.”

Warner Brothers, whose “The Dark Knight Rises” was playing in Aurora during last July’s shootings, has been soft-pedaling weaponry on its posters lately (unless you count the robots and helicopters pounding each other in the ads for “Pacific Rim”).

Still, Ken Jeong had some hot handgun moments in the red-band trailer for “The Hangover Part III.”

After the discussion of gun violence and pop culture at a January meeting between Vice President Joseph R. Biden Jr. and a number of entertainment executives, the Motion Picture Association of America, an industry trade group, bolstered its ratings system with a campaign to remind parents of the content advisories that accompany a movie’s letter rating.

But don’t look for any move to change the movies, or the high-caliber images used to sell them. “We believe our role is to help parents be informed of a film’s content, not to dictate the content in any way,” Kate Bedingfield, an M.P.A.A. spokeswoman, said in an e-mail last week.

MICHAEL CIEPLY

Alcoa Sees Brighter 2013, but Remains Cautious

The company posted a fourth-quarter profit on Tuesday, in line with Wall Street expectations, and handily beat expectations on revenue, helping calm investors' nerves after a rocky 2012.

"I'm more optimistic that 2013 is a year with upside potential compared to where we came from," Alcoa Chief Executive Klaus Kleinfeld told CNBC on Tuesday.

Shares of Alcoa rose 1.3 percent in after-hours trading, as investors were buoyed by Alcoa's turn to profit.

Analysts breathed a sigh of relief from the results of the first S&P 500 company to report fourth-quarter results, hoping it was a sign of things to come.

"I think it was a good solid quarter. Not a barnburner but a good quarter," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills. "It's certainly important in this type of environment to look at revenues."

Investors tend to scrutinize Alcoa's results for hints on where the overall economy is headed, as the company's aluminum products are used in the automotive, appliance and airline industries.

The company said it expects global aluminum consumption growth of 7 percent in 2013, up slightly from 6 percent in 2012. Alcoa continues to forecast a doubling of global aluminum demand between 2010 and 2020.

Alcoa forecasts global growth in the aerospace, automotive and construction markets, among other industries, in 2013.

PROFIT IN LINE

The earnings were a positive turn for Alcoa, whose core business of mining bauxite and producing aluminum has been hit in recent years by a persistently low metal price.

For the fourth quarter, the company reported net income of $242 million, or 21 cents per share, compared with a net loss of $191 million, or 18 cents per share, in the year-ago period.

Excluding one-time items, net income was $64 million, or 6 cents per share, in line with average analysts' expectations of 6 cents a share on revenue of $5.6 billion, according to Thomson Reuters I/B/E/S.

Sales were $5.89 billion, beating analysts' expectations, but down 1.5 percent from the year-ago quarter as the average realized price per tonne of aluminum fell slightly.

Alcoa trimmed costs by 12 percent in the fourth quarter, due in part to fewer restructuring expenses.

The company's realized price for aluminum fell roughly 11 percent in 2012.

(Reporting By Ernest Scheyder and Julie Gordon; Editing by M.D. Golan)

High & Low Finance: Euro Avoids Collapse, but Its Future Remains Uncertain

Only a few months ago, it was front-page news. Would the euro collapse? Would most of southern Europe go broke, unable to borrow money at any reasonable rate? Would that bring on a new world recession?

But in this week’s foreign policy debate between President Obama and Mitt Romney, the euro never came up. Europe was mentioned once, but the reference had nothing to do with economics. Mr. Romney did refer to Greece, but only to say we were in danger of going down the same path if we did not change our ways.

To a surprising extent, the perception seems to be that the European situation is under control. That is true if all you worry about is whether bondholders will get paid. It is false if you have a broader perspective.

The focus of the last couple of years on borrowing costs for peripheral members of the euro zone was, in retrospect, unfortunate. It was always clear that Europe, as a whole, had the ability to solve that issue if it wished to do so. The European Central Bank, like the United States Federal Reserve, has the ability to print money, and that is what it finally did.

But the real issue was — and remains — whether the peripheral countries could turn into successful economies while staying in the euro zone. On that issue, progress is painfully slow.

“The actions of the E.C.B. and other policy makers in Europe have generally had the effect of filling large financial gaps in periphery bank and sovereign funding,” wrote Bob Prince of Bridgewater Associates this week, “but have done relatively little to resolve competitive imbalances among these economies.”

Banks are hesitant to lend. On Thursday, the European Central Bank report on loan activity in September showed a record 1.4 percent year-over-year decline in loans outstanding to private sector companies and individuals in the euro zone. “These numbers are rather consistent with the bleak picture painted by business surveys, showing an ongoing contraction of activity,” wrote François Cabau and Phillippe Gudin of Barclays Capital in a note to clients.

If peripheral countries simply had fixed exchange rates, rather than a common currency, they could and almost certainly would have devalued their currencies long before now. That is the normal prescription for countries in financial distress. Couple it with austerity and revivals can be surprisingly rapid, as exports surge and imports plunge.

As it is, the process is sure to be long and painful, but not certain to succeed.

As Europe stumbles and slows, there has been a temptation in the United States to turn our attention elsewhere, to Asia for economic reasons and to the Mideast for political ones. Mr. Romney has tried to add South America to that mix. But neither the Romney nor Obama campaign has wanted to talk much about Europe, a fact that has been noted with a little alarm in Europe.

Richard Lambert, the chancellor of Britain’s Warwick University — and a former editor of The Financial Times as well as a former central banker — was in New York this week trying to convince Americans that they should care, and predicting that the euro will survive.

“The European Union has the capacity to get its affairs into order, if it has the political determination to do so,” he said in a speech at New York University. “This is a crisis about economic imbalances within the euro zone, more than it is about fault lines with the rest of the world.”

That is a point worth remembering. The euro zone as a whole is running smaller budget and current account deficits than is the United States. If it were one country, there might be articles about depressed regions, but not talk of collapse.

But it is not one country. It is taking halting steps in that direction, with a move to unified bank supervision, but political union is not going to happen; Angela Merkel’s name is never going to be on a ballot outside of Germany. Nor is there going to be easy labor mobility around Europe, even though that is supposedly guaranteed now. Cultural and language differences assure that.

Floyd Norris comments on finance and the economy at nytimes.com/economix.