The US unemployment rate remained unchanged at 5.9% in July, according to government statistics.

Looks like the recovery stalled in July

Christopher Low Chief economist FTN Financial

The construction industry continued to shed workers, but this was partially offset by a rise in the number of people working in the service sector, the Department of Labor said.

Companies' reluctance to take on more staff continued to worry economists, with some predicting that this would make the Federal Reserve loath to raise interest rates.

"Looks like the recovery stalled in July," said FTN Financial chief economist, Christopher Low.

"The Fed is most likely to stay on hold. We don't see the Fed moving this year," said Northern Trust economist Asha Bangalore.

Part time work

The total number of people working in the US, excluding the farm sector, remained stable at 130.8 million, the Department said.

There's very little growth in the private sector

Mark Vitner Senior economist Wachovia Securities

The number of unemployed persons also remained static at 8.3 million, the Department figures said.

But more people who would have liked to work full time held part time work instead during July.

"The average work week went down and that was down in particular in the manufacturing sector," said Dresdner Kleinwort Wasserstein senior economist, Kevin Logan.

"Manufacturing activity hit an air pocket in July."

"There's very little growth in the private sector and I think that it's getting awfully hard to explain this away," said Wachovia Securities senior economist, Mark Vitner.