The Labor Department says the unemployment rate rose to 8.3 percent from 8.2 percent in June.
July's hiring was the best since February. Still, the economy has added an average of 151,000 jobs a month this year, roughly the same as last year's pace. That's not enough to satisfy the 12.8 million Americans who are unemployed.
The rate increased because the government uses two surveys: A survey of businesses showed job gains, but a survey of households showed fewer people had jobs. Economists say the business survey is more reliable.
High unemployment could hurt President Barack Obama's re-election hopes. No president since World War II has faced re-election with unemployment over 8 percent.