U.S. employers added fewer jobs than expected in July and the unemployment rate rose, meaning the U.S. Federal Reserve Board may decide to hold interest rates for the first time in two years next week.

Although 113,000 jobs were added in July, the unemployment rate rose to 4.%, the Bureau of Labour Statistics of the U.S. Department of Labor reported on Friday. Job gains occurred in several service-providing industries, including professional and business services, health care, and food services. Employment also rose in mining. Average hourly earnings rose by 7¢, or 0.4% in the month.

The number of unemployed persons edged up to 7.2 million in July. A year earlier, the number of unemployed persons was 7.5 million and the jobless rate was 5.0%.

Over the month, the unemployment rates for most major worker groups — adult women (4.2%), teenagers (15.5%), whites (4.1%), blacks (9.5%), and Hispanics (5.3%) — showed little or no change. After declining in June, the jobless rate for adult men increased to 4.2% in July. The unemployment rate for Asians was 2.7%, not seasonally adjusted.

Following a decline in June, the number of long-term unemployed persons — those unemployed 27 weeks or longer —returned to its May level of 1.3 million. These long-term unemployed accounted for 18.6% of total unemployment, about the same as in May.

After trending down for several months, the number of unemployed persons who were reentrants to the labor force increased to 2.4 million in July. This group accounted for 32.7% of total unemployment, up from 30% in June.

Both total employment (144.3 million) and the employment-population ratio (63.0%) were essentially unchanged in July. The labor force participation rate held at 66.2%.

About 1.5 million persons (not seasonally adjusted) were marginally attached to the labour force in July, the same as a year earlier. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.

Among the marginally attached, there were 428,000 discouraged workers in July, also about the same as a year earlier. Discouraged workers were not currently looking for work specifically because they believed no jobs were available for them. The other 1.1 million marginally attached had not searched for work for reasons such as school attendance or family responsibilities.

The Associated General Contractors of America commented on the report, which showed little change in overall construction employment for the fifth straight month.

“The jobs report for July tells a tale of two construction industries,” Ken Simonson, chief economist for the AGC. “Seasonally adjusted construction employment edged up by 6,000 jobs in July to 7.503 million. But nonresidential building and specialty trades employment added nearly 16,000 employees. That was about one out of seven net new hires in the economy, even though these sectors are just 2% of total nonfarm employment.

“Although the overall employment report showed only modest growth, with a gain of 113,000 jobs, there are still many industries that are generating construction activity,” Simonson stated. “Manufacturing, energy and power, business and leisure travel, and hospitals are all adding facilities at a high rate that should sustain further growth in construction jobs.

“This jolt of good news is tucked into a report that also shows the slide in residential building and specialty trades employment, which together lost 9,000 jobs for the month,” Simonson added. “I expect these categories will continue to hemorrhage jobs once current projects are completed.

“The fifth construction employment category, heavy and civil engineering, shed 1,000 jobs,” Simonson pointed out. “But I expect to see further growth in this sector. Architectural and engineering services added 10,000 jobs in July, seasonally adjusted. Employment in engineering and drafting services, a leading indicator for heavy and civil engineering, jumped by a hefty 16,000 from June to July before seasonal adjustment and is up by 35,000, or more than 4%, since July 2005.”