The economy continued to advance at a sturdy pace in July, creating 209,000 jobs and adding to a string of positive economic news in recent weeks that suggested it was gaining strength after years of lackluster growth following the recession.

Last month's job gains were lower than in recent months and less than Wall Street had expected, helping to calm fears that the economy was about to accelerate to a point where the Federal Reserve might decide to start raising interest rates earlier than anticipated.

The new numbers were the sixth straight month in a row of job gains of more than 200,000, the healthiest pace of job creation over that length of time since 2006.

The Labor Department said Friday that unemployment had increased to 6.2 percent. Economists had been expecting the unemployment rate to hold steady at 6.1 percent. Many economists viewed the slight rise in unemployment as a modestly positive sign, in part because more people reported that they were looking for work, suggesting that many of them were starting to see greater job opportunities.

On the jobs numbers, the consensus among economists was an expectation of about 230,000 new jobs. The July figure was well below the revised 298,000 surge reported in June.

"This report is consistent with a moderation in economic growth in the second half of the year," said Dean Maki, chief U.S. economist at Barclays. "This is a labor market that is growing solidly, just not quite as fast as in prior months."

General optimism about the economy was supported Wednesday when the Commerce Department, in its initial estimate of the economy's overall output for April, May and June, reported that the gross domestic product had grown at a seasonally adjusted annual rate of 4 percent for the quarter, surpassing expectations, rebounding from a 2.1 percent decline during the harsh winter quarter.

But in July wages barely moved, inching up by just a penny and leaving them only 2 percent higher than a year ago, according to the Labor Department. That news contrasted with a report Thursday that U.S. labor costs had recorded their biggest gain since the third quarter of 2008. The Employment Cost Index report found that labor costs had jumped 0.7 percent, up sharply from the 0.3 percent rate for the first quarter. The 0.5 percent average for the first half, though, was not far from the underlying trend during the previous year.

The fears on Wall Street that wages might be set to accelerate contributed to a market sell-off Thursday, as some investors expressed concerns that an increasingly tight labor market might force the Fed to raise interest rates sooner than expected because of fears of higher inflation. On Friday morning, after the jobs report, Wall Street stabilized.

The numbers reported Friday showed that retail employment figures were higher for July, up by 27,000 jobs, and for the two previous months after revisions. Jack Kleinhenz, chief economist for the National Retail Federation, said that the news was encouraging but that "no one can guarantee smooth sailing," adding that "choppy growth among business lines will continue."

Manufacturing added 28,000 jobs last month, but the Alliance for American Manufacturing said the sector has recovered only 30 percent of the jobs lost during the recession.

"There are many obstacles that stand in the way of a true resurgence: a paucity of investment in our infrastructure, high trade deficits and currency manipulation by countries like China and Japan," the alliance said in a news release.

Friday's report seemed to seal the notion that the economy had yet to burst free of its straitjacket.

Members of the Fed on Wednesday emerged from a two-day meeting to acknowledge that growth had rebounded, but they stressed concern about the jobs market, saying conditions were below the level that most officials at the central bank considered healthy.

The labor force participation rate rose slightly in July to 62.9 percent. But Joshua Shapiro, chief United States economist for MFR, said in a note to clients that the historically low rate of participation was still troubling because some of the youngest workers were dropping out of the job force.

"The participation rate is at lows not seen since 1978," Shapiro said, "and therefore conditions in the labor market are certainly worse than indicated by the reported steep drop we have been seeing in the unemployment rate."