US creates 162,000 more jobs, but with fewer hours, less pay

US unemployment rate drops to 7.4 percent, but hours worked and wages drop slightly in July. Also this week in the economy: Stock market hits new record and tech world eyes Google's new hardware offerings

The recovery in America's labor market is so slow it's like a party where no one celebrates, except maybe Wall Street. Every time the labor market starts to show sustained momentum, along comes new evidence that even expected lackluster growth is sometimes too much to hope for.

Take Friday's jobs report. It showed the US economy created 162,000 jobs in July, fewer than expected, and that employees worked slightly fewer hours and for slightly less pay. If it weren't for the auto industry's dynamic recovery and strong gains in the wholesale and retail trade sector, the numbers would have been even worse.

The unemployment rate fell from 7.6 percent in June to 7.4 percent in July, but part of that improvement came because people were dropping out of the labor force.

In one encouraging sign for the employment market, Amazon.com announced this week that it would be adding 7,000 jobs at its warehouses around the nation. The announcement came a day before President Obama visited an Amazon.com warehouse to deliver a major speech on how to accelerate economic growth.

Stock market hits new record. On Wall Street, investors cheered the weaker-than-expected jobs numbers because they suggest that the Federal Reserve will not move quickly to trim back its program of pumping extraordinary amounts of money into the economy to keep interest rates low. Low interest rates have buoyed the market since the recovery began.

This summer the market has been on a tear. The S&P 500 index, which broke through the 1700 barrier Thursday, continued its gains on Friday, rising to a new record of 1709.67. The S&P has risen in five of the past six weeks.

The Federal Reserve, meeting this week in Washington, issued a statement that noted the softness in the economy with slightly more emphasis than in the past.

Auto sales drive toward post-recession record. US sales of cars and light trucks in July were down slightly from June, but still motored along at a 15.7 million annual clip. Analysts say continued strong sales of pickup trucks this fall should push the industry to annual sales of about 16 million vehicles. That would make 2013 the industry's best year since the Great Recession.

GDP growth stronger than expected. If the economy is not accelerating as expected, neither is it slowing much in the face of Washington's budget cuts. Economists had expected the economy to slow considerably in the second quarter. Instead, it grew at a 1.7 percent annual pace, as measured by gross domestic product (GDP), the nation's output of goods and services, the Commerce Department reported. That's not robust growth, but it's far better than the revised 1.1. percent growth in the first quarter or the 0.1 percent in the last quarter of 2012.  

US innovation gins up new products. A new Motorola smartphone for Android – the Moto X – drew attention from the tech world, partly because of its functions (like an always-on voice command system) and partly because it represents a big gamble for Motorola's parent, Google, in the hardware business. Perhaps Google's other hardware release this week has more far-reaching implications, however. Google's Chromecast allows viewers to turn their TVs into a smart TVs capable of streaming videos on the Internet. Other devices do this, too, but Google's does it for $35, about a third of the cost of the next cheapest solution. Such cheap devices could speed the move from subscription-based cable TV to Internet-based systems.