By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) — Employers sharply scaled back layoffs in July, and the unemployment rate dipped for the first time in 15 months, sending a strong signal that the worst recession since World War II is finally ending.
A net total of 247,000 jobs were lost last month, the fewest in a year. That compares with 443,000 jobs that disappeared in June. And the unemployment rate for July declined to 9.4% from 9.5% in June.
The snapshot the Labor Department released Friday offered other encouraging news, too: Workers' hours nudged up after sinking to a record low in June, and paychecks grew after having stagnated or fallen.
"There's clearly been a turn for the better," said economist Ken Mayland, president of ClearView Economics. "The worst is behind us in terms of layoffs."
Still, the labor market remains on shaky ground. The 247,000 jobs lost in July represent a vast improvement on much higher job losses earlier in the year. But they're a far cry from the positive job growth needed to sustain an economic recovery.
When the economy is healthy, employers need to add a net total of around 125,000 jobs a month just to keep the unemployment rate stable. And to push the jobless rate down to a more normal 5% range, it would take stronger job growth — of at least 200,000 jobs a month. Economists say it might take until 2013 to drive down the unemployment rate to 5%.
Yet the new figures were better than many analysts were expecting, and they signaled improvements to an economy that has been clobbered by the recession. Analysts had been forecasting that job losses would amount to around 320,000 and that the unemployment rate would tick up to 9.6%.
Stocks surged after the report was released. In early-afternoon trading, the Dow Jones industrial average jumped 175 points, or 1.9%, and other stock averages also gained sharply.
President Barack Obama welcomed the news, saying the numbers indicate "the worst may be behind us" in a recession well into its second year.