The July jobs report, released on August 4, 2006, showed a rise in unemployment and that the growth of new jobs was smaller than expected.

Unemployment rose to 4.8% in July, taking the bloom off the rosy economic picture at the close of the second quarter for some. The likelihood is that the Federal Reserve Board, which meets this Tuesday, will put a hold on interest rate increases in order to keep inflation from becoming a runaway. The stock market reacted to the probable pause with an initial surge but only momentarily. The possibility that the economy was slowing outweighed the short term benefits of the anticipated rate pause.

The view from the administration was more optimistic. Commerce Secretary Carlos Gutierrez seemed hopeful in spite of the hike in the unemployment rate, pointing to the 113,000 new jobs that were created.

“With the addition of 113,000 jobs and increasing wages, today’s employment report shows President Bush’s economic policies are working for American workers. Since 2004, the U.S. has created more jobs than the rest of the G-7 countries combined. Our economy has grown a strong 4.0 percent this year” Gutierrez declared during a visit to a power tool manufacturing facility in Virginia Beach, VA. “We will continue to advance the President’s economic policies of keeping taxes low and spending down in order to create jobs and opportunities for U.S. families and businesses,” he added.