The figure – which measures the number of jobs outside the US farming sector – was below economists’ expectations of more than 180,000 and the government also cut its previous estimates for hiring in May and June.
Nonetheless, the new jobs helped the unemployment rate to fall to 7.4%.
That was down from 7.6% and is the lowest jobless rate in four years.
The news adds to the picture of a slowly growing US economy and may make its central bank more likely to end its monetary stimulus programme.
The Federal Reserve is currently buying $85bn a month in bonds which helps to keep borrowing costs low.
However, there is much speculation as to when the Fed will start to rein in this stimulus programme.
Its chairman, Ben Bernanke, has said that it might start cutting down the rate of bond buying by the end of the year and stop altogether by the middle of 2014, depending on the strength of the economy.
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image of Samira Hussain
BBC business reporter, New York
At first glance, a 7.4 %unemployment rate seems like something to cheer about. That’s a point two percent decline from the month before and a far cry from the double digits we saw at the height of the US financial crisis. But a closer look at the labour participation rate tells a different story. The current percentage of working age adults in the United States in the labour force sits at 63.4%. That calls the actual strength of the US economic recovery into question. While the number of people who have a job went up, there are still a number of people who have dropped out of the labour force completely. Couple that with the weak GDP growth and slowing in hiring shows this economy isn’t picking up as robustly as some would hope.
Earlier this week, figures showed that the US economy grew at a faster-than-expected annualised pace of 1.7% in the second quarter of the year.
That was up from the growth rate for the first three months of 2013, which was revised lower to 1.1% from 1.8%.
Gordon Charlop, of Rosenblatt Securities said the figures were moderately encouraging: “The idea that the unemployment dropped at all, went below 7.6%, is showing that the trend is going the right way.
“We’re sort of grinding along here. We’re not surging. I don’t think there’s anything here that will cause the Fed to do anything significant.”
Revisions to previous months’ data saw May’s jobs increase downgraded to 176,000, below the 195,000 previously estimated, while June’s increase was lowered to 188,000, from the 195,000 originally reported.
Paul Ashworth, chief US economist at Capital Economics, said despite that, the employment picture was much brighter than last year: “While July itself was a bit disappointing, the Fed will be looking at the cumulative improvement.
“On that score, the unemployment rate has fallen from 8.1% last August, to 7.4% this July, which is a significant improvement.”
Other figures released on Friday confirmed the picture of moderate economic growth.
US consumer spending and inflation both rose in June, with the US Commerce Department saying spending was 0.5% higher and annual inflation running at 1.3% – although that is still well below the US target of 2%.