New hiring falls far short of needed boost

There’s still a pulse in the anemic labor market — but not enough to help it get up and run.

Companies continued to add jobs in July, but only by a small margin and not nearly enough to jumpstart the economic recovery that Wall Street is waiting to embrace as investors hoard cash on the sidelines.

Private employers hired far fewer workers than expected in July — just 71,000 — sending stocks tumbling and Federal Reserve Chief Ben Bernanke into consultations on what his next steps will be to boost the sagging economy.

“The labor market improvement has slowed to a glacial pace,” said chief economist Nigel Gault at IHS Global Insight. It was the seventh straight month of weak hiring.

Overall, the Labor Department said non-farm payrolls fell 131,000 last month, dragged down by the flushing of the last 143,000 temporary US Census jobs.

By changing the way it counts the jobless, the agency said the unemployment rate held steady at 9.5 percent.

Wall Street had expected overall employment to fall by 65,000 in July, with private-sector hiring increasing 90,000. The Dow Jones industrial average had tumbled as much as 160 points yesterday but recovered to close 21.42 lower, or 0.2 percent, at 10,653.56. The Standard & Poor’s 500 index fell 4.17, or 0.4 percent, to 1,121.64, and the NASDAQ dropped 4.59, or 0.2 percent, to 2,288.47.

The US dollar dropped to near a 15-year low against the yen and fell versus the Euro.

Meanwhile some economists believe Bernanke could announce behind-the-scene stimulus help in the form, perhaps, of buying more Treasury bonds.