Fears of a double dip recession in the United States were intensified today with the release of weak jobs numbers.

Total nonfarm payroll employment was 130.8 million in July, up by just 6,000, far less that was expected. In fact, total employment has been little changed since February. Also, aggregate weekly hours worked plunged 0.6% in July, in part because factories cut overtime hours. The unemployment rate remained at 5.9%.

“The downside risks to the U.S. economic outlook were raised a notch this morning with news that U.S. employment in the non-farm business sector barely rose in July,” says Bank of Montreal.

RBC Financial Group says that the weak hours worked results suggest that the labour market could remain in a holding pattern just a little longer.

“The July employment report shows that firms continue to cut costs — big time. This is good for profits and won’t last forever,” offers BMO Nesbitt Burns. “The puzzle is how retail sales will respond to all these layoffs, but auto sales numbers show that spending activity is holding up.”

Also, U.S. personal spending rose 0.5%, and incomes were up 0.6% in June. The strong income increase was the one bright spot that some economists saw in this morning’s data.

Nevertheless, some economists are lowering their outlook for U.S. GDP following the report. “Today’s data, alongside other disappointing figures released earlier in the week, suggest the economy has less momentum than we previously thought. As a result, we expect real GDP to increase a lesser 3%-3.5%, annualized, in the third quarter instead of 4.25%. In addition, we have pushed out the expected date of the Fed’s inaugural tightening to early next year from November,” says BMO.

“Consumers appear to be rebuilding their balance sheets and in the process laying the foundation for a more solid recovery later this year. But for now, look for the U.S. Federal Reserve to give consumers and businesses all the help they can get and keep interest rates low and steady. We don’t expect any rate hikes until next year, but we don’t expect any rate cuts this year either,” says RBC. “A rate cut before year-end would only serve to rattle market confidence some more if pushed through by the Fed. A steady hand by the Fed looks like the most likely scenario as the U.S. economy gradually gathers strength.”