The U.S. economy created 117,000 net new jobs in July, bringing the official unemployment rate down by a tenth of a percentage point to 9.1 percent, the Labor Department said Friday.

Most economists forecast job gains in the range of 75,000-80,000 and a jobless rate stuck at 9.2 percent.

The better-than-expected numbers sparked an opening rally on the New York Stock Exchange in the wake of Thursday's 513-point fall in the benchmark Dow Jones industrial average.

Friday's early gains were soon erased, however, and the market dipped back into negative territory.

Nearly 14 million people remain out of work two years after a recession that destroyed 8.4 million jobs, while the workforce participation rate - the proportion of the population working or seeking work - declined last month to 63.9 percent, the lowest since 1984.

The broader U6 unemployment rate, which includes part-time workers who would prefer full-time jobs and people who have given up looking, dipped in July from 16.2 percent to 16.1 percent.