U.S. employers throttled back on layoffs in July, cutting just 247,000 jobs, the fewest in a year, and the unemployment rate dipped to 9.4 per cent, its first decline in 15 months.

It was a better-than-expected showing that offered a strong signal that the recession is finally ending.

The new snapshot, released by the U.S. Labour Department on Friday, also offered other encouraging news: workers' hours nudged up after sinking to a record low in June, and paycheques grew after having fallen or flatlined in some cases.

To be sure, the report still indicates that the jobs market is on shaky ground. But the new figures were better than many analysts were expecting and offered welcomed improvements to a part of the economy that has been clobbered by the recession.

Analysts were forecasting job losses to slow to around 320,000 and the unemployment rate to tick up to 9.6 per cent.

"There's clearly been a turn for the better," said economist Ken Mayland, president of ClearView Economics. "The worst is behind us in terms of layoffs. Now we need to see more hiring."

The dip in the unemployment rate — from June's 9.5 per cent — was the first since April 2008. One of the reasons the rate went down, however, was because hundreds of thousands of people left the labour force. Fewer people, though, did report being unemployed.

All told, there were 14.5 million out of work in July.

Retailers fired, government hired

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.3 per cent in July. That's down from 16.5 per cent in June, which was the highest on records dating to 1994.

Also heartening: job losses in May and June turned out to be less than previously reported. Employers sliced 303,000 positions in May, versus 322,000 previously logged. And, they cut 443,000 in June, compared with an earlier estimate of 467,000.

The job cuts made in July were the fewest since August 2008.

The slowdown in layoffs in part reflected fewer jobs cuts in manufacturing, construction, professional and business services and financial activities — areas that have been hard hit by the collapse of the housing market and the financial crisis.

There also were fewer layoffs in the temporary-help industry, which analysts watch for clues about future hiring. Retailers, however, cut more jobs in July.

Those losses were blunted by job gains in government, education and health services, and in leisure and hospitality.

The worst of the job cuts have passed.

The deepest job cuts of the recession came in January, when 741,000 job disappeared, the most in any month since 1949.

Since the recession began in December 2007, the economy has lost a net total of 6.7 million jobs.