The new figure for private-sector job growth was less than the 90,000 economists had forecast, according to the median estimate in a Bloomberg News survey.
That prompted a quick sell-off on Wall Street. The Dow Jones industrial average dropped 160 points in morning trading after the jobs report was released, but it pared the loss later to close down 21. Broader market indexes also fell.
"There is still a labor-market recovery, but it's a very, very weak one," said Nigel Gault, chief U.S. economist at IHS Global Insight.
Overall, the economy lost 131,000 jobs in July, as the federal, state, and local governments shed positions, including 143,000 part-time census workers. The loss of census workers was expected. It was the second straight month of overall job losses.
The unemployment rate last month was 9.5 percent, the same as in June, but even that was a disappointment for economists, who had expected it to rise slightly.
An increase in the rate, counterintuitively, would have been seen as a positive sign for the economy because it would have signaled that some of the 1.2 million unemployed workers who had given up looking for jobs had optimistically returned to the job market - and would be counted as unemployed until they found work.
"We expected more people to come into the labor market to look for jobs as they perceived the labor market was getting better and there was a better chance of getting a job," Di Natale said.
One sign of the weak job market is the increase in the length of time it is taking for the unemployed to find work: At the beginning of the recession, it took an average of 16.5 weeks to find a new job. For anyone unemployed in July, the average was 34.2 weeks.
Among other troubling numbers in Friday's report was a drop in temporary job positions, which by fell by 5,600 after nine months of growth.
"Temp help is a leading indicator, a harbinger of what is to come for the jobs market," Di Natale said. "Employers, before they start hiring full-time help, hire temporary help."
Instead, the drop in temporary help suggests full-time job growth will be slow going forward.
There were some glimmers of hope in slight upticks in the length of the workweek and pay: Average weekly hours worked was 34.2 in July, up from 34.1 in June. Average hourly wages rose four cents to $22.59.
The figures, particularly the average weekly hours, suggest companies are experiencing increased production and growing labor demands but are using existing staff.
"That is a good sign, though contradictory to what we are seeing in temp help," Di Natale said. "If companies are raising hours, there must be work to be done. They are just not hiring new workers."
Among those hiring in July was New Way Air Bearings in Aston, Delaware County, a manufacturer of frictionless bearings used in making precision machine tools and flat-panel displays.
"Business is growing back again and we need people," said Nick Hackett, the company's president. "We've seen a broad increase in orders across all our markets."
New Way hired three people in July and had added 13 so far this year. As business declined during the recession that began in late 2007, New Way's employment dropped to 37 from about 80. Now the company is ramping up to 55.
That will include three more openings - for a manufacturing-development engineer, a product-development engineer, and a production controller.
But finding people for some jobs has been tough, Hackett said. While most of those offered jobs accepted them, he said, two machinists turned them down, saying the jobs didn't pay enough to make it worth going off unemployment benefits.
Meanwhile, after some downsizing, employment at Philadelphia insurer Cigna Corp. is beginning to trend upward, but just slightly, said Peter Giocchini, senior director of talent acquisition.
The company recently added 115 customer-service jobs in Scranton and has been adding clinicians in Arizona.
In August, the company plans to hire 30 to 50 employees at its Horsham pharmaceutical mail-order operation, Giocchini said. Most will be customer-service representatives, but five to 10 of the openings will be for pharmacy technicians.
However, layoffs persist in the area. Chrysler Financial Services said that, effective Aug. 31, it would close its Chalfont building and lay off 290 people, many of them customer-service representatives.
Contact staff writer Christopher K. Hepp at 215-854-2208 or firstname.lastname@example.org.
This article includes information from the Associated Press.