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.

Summer Hiring Reflects Sluggish Demand at Most San Francisco Bay Area Firms

There seems to be no end to bad financial news for law firms: Demand is flat, revenue growth is expected to fall short of last year's small gains, billable hours and realization rates are down and costs are rising.

And judging from law firms' recruitment for their 2013 summer class, no one is expecting the landscape to change dramatically anytime soon. An informal survey of 11 Am Law 200 firms conducted by The Recorder found that the appetite for summer associates has shrunk by nearly 40 percent from 2007. For law students, the good news is that recruitment seems to have stabilized. The good news for firms is that with smaller class sizes, it's much easier than in the boom days to get the pick of the litter.

Most of the firms will welcome Bay Area summer classes next year of about the same size as in 2012.

But several firms did diverge from last year's precedent. An above-average acceptance rate yielded an abnormally large 2012 class of 43 summer associates in the region for Wilson Sonsini Goodrich & Rosati, law school recruiting manager Stacy Trzesniewski said. The firm's Bay Area class for the coming summer will be about half that size.

Jones Day, meanwhile, is doubling down. To power its plans for expansion in California, the firm hired 44 percent more summer associates than last year in the Bay Area, said Robert Mittelstaedt, partner in charge of the San Francisco office. As many of its competitors are retrenching, the firm sees a chance to claim a greater share of the talent pool, Mittelstaedt said.

"We think we will grow in the future as much as we have in the past, and we want to be ready for it," he said. "We have a hard time passing up good talent."

Yet even a firm set on growth like Jones Day is hiring far fewer summer associates than it did before the recession. And most firms have slashed their recruitment further. Among the 11 firms surveyed, summer hiring has fallen by 38 percent on average from 2007 to 2013, which is consistent with nationwide statistics.

And for some firms, the decline was even steeper. Pillsbury Winthrop Shaw Pittman will have seven associates in its Bay Area offices in 2013, less than a third of the 25 it recruited for summer 2007. Orrick, Herrington & Sutcliffe will have 17 summer associates in the region in 2013, a 59 percent decline from the 41 it brought on board for 2007.

Anemic recruiting was among the factors that led the National Association for Law Placement to deem 2011 the worst entry-level job market in more than 30 years. Although it is too soon to produce statistics for fall 2012, NALP executive director James Leipold said he expects the volume of hiring done by firms to be "flat to a slight uptick" compared to last year.

Powered by demand for legal services in Silicon Valley, the Bay Area appears to be marginally outperforming other markets, Leipold noted. Career development officials at UC-Hastings, UC-Berkeley, UC-Davis and Santa Clara University said they saw a slight uptick in the number of employers who came to campus for formal recruitment.

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