U.S. businesses exceeded economists' expectations, reporting they added about 163,000 jobs in July instead of the 90,000 to 100,000 forecasted.
But the national unemployment rate still jumped from 8.2 percent to 8.3 percent.
The numbers come from two different surveys: one is a survey of businesses reporting how many people they employed; the other is a survey of households, asking people if they worked in the last 30 days and if they were looking for work but unable to find it.
Investors on Wall Street saw the numbers as a positive.
The Dow Jones jumped more than 217 points and the NASDAQ jumped 58.
But Wells Fargo Senior Economist Mark Vitner said the numbers show the economic recovery is sluggish.
"One hundred and sixty-three thousand jobs that were added in July was better than expected," he said, "but expectations were set so low, they weren't all that hard to beat."
Vitner said the economy needs to be adding at least 200,000 jobs a month to make a dent in the unemployment rate.
But some employment and staffing agencies in Charlotte say they are seeing a gradual uptick, especially in certainly industries.
"It's not doom and gloom, specifically in Charlotte," Matt Donato, Vice President at Accrue Partners, said.
Donato said business is up about 38 percent from last year and that they've seen a lot more positions open in information technology, engineering and corporate support, like administrative positions.
"We've had a lot of success stories the first and the second quarters," he said. "In fact, this is one of our better years so far."
Managers at other staffing agencies, like Aerotek, said they've seen growth in manufacturing jobs, and that people with specialized skills, like maintenance mechanics and welders, are in high demand.
Vitner said there is one point of good news in the latest numbers.
"The numbers had looked like we were sliding back into recession or at risk of sliding back into recession," he said. "This report really takes that off the table."