U.S. companies hired more workers than expected in July, but continued weakness in the manufacturing sector pointed to sluggish economic growth.
The economic recovery has lost steam in recent months as it has been buffeted by the euro zone debt crisis, a struggling U.S. labor market and concerns over higher taxes and government spending cuts that are set to take place early next year.
Economists said Wednesday's data suggested further slow growth after a 1.5 percent growth rate in the second quarter, though the economy should avoid recession.
"I don't see any evidence that the weakness is truly feeding on itself at this point but at the same time, there's no obvious spark for the economy to look a lot better in the next few months, either," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics in New York.
The data came as Federal Reserve held off from offering any new stimulus to boost the economy even as it signaled further bond buys could be forthcoming.
Read more: http://www.reuters.com/article/2012/08/01/us-usa-economy-employment-idUSBRE8700NP20120801
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