Official figures show that US jobs growth was stronger than expected in July as private employers stepped up hiring. The figures could ease fears that the US economy is sliding into a fresh recession. US employment increased by 117,000 in July, the Labor Department said. Economists had expected a gain of around 85,000. The US unemployment rate dipped to 9.1% from 9.2% in June, but this was mostly due to people leaving the labour force. The jobs figures for May and June were also revised to show 56,000 more jobs added than previously reported The report was the first encouraging piece of economic data in some time. Fears that US economy might be sliding back into recession, coupled with Europe's inability to deal with its spreading debt crisis, have rocked global financial markets, but today's figures calmed markets. Top policymakers at the US Federal Reserve will sift through the report when they meet on Tuesday but are not expected to announce any new measures to support the sputtering US recovery. The Fed has cut interest rates to zero and spent $2.3 trillion on bonds, but officials have said they want to see how the economy fares before taking any further action. All of the gains in US employment in July came from the private sector, where jobs rose 154,000 - an acceleration from June's 80,000 increase and more than the 115,000 expected by economists. Government employment dropped 37,000 in July, a ninth straight month of job losses. The drop was mostly due to a government shutdown in Minnesota that left thousands of state workers without pay during the survey period. Within the private sector, most of the job gains were concentrated in the services sector. Temporary help - an indicator of future permanent hiring - rebounded modestly after declining for three straight months. Manufacturing jobs rose 24,000 after increasing 11,000 in June. Most the gains came from the car sector. Construction employment increased 8,000 after dropping 5,000 in June.