Employers cut jobs at slower pace in July, triggering a drop in the U.S. unemployment rate to 9.4 percent from 9.5 percent in June, the U.S. Department of Labor reported today.

Overall, the ranks of unemployed grew by 247,000 after 443,000 jobs were eliminated in June, the Department of Labor said.

“The American consumer is by no means out of the woods, but we are moving in the right direction,” Richard DeKaser, chief economist at Woodley Park Research in Washington, D.C., told Bloomberg. “We will see moderate growth in the second half and more of a pickup in 2010.”

The latest numbers brought the total of jobs lost since the recession began in December 2007 to about 6.7 million, the biggest decline in any post-World War II economic slump. Payrolls were forecast to drop 325,000 and the jobless rate was expected to rise to 9.6 percent, Bloomberg said.

Along with predictions for further increases in unemployment in coming months, stagnant wages and falling home values mean a lack of consumer spending will likely slow an economic recovery, analysts say.

The Labor Department report showed that factory payrolls fell 52,000, the fewest in a year, after decreasing 131,000 in June.

Builders cut 76,000 jobs after eliminating 86,000 in June. Financial firms decreased payrolls by 13,000, and service industries cut 119,000 positions, down from 220,000 in June.

Government payrolls increased by 7,000 after falling 48,000 the prior month.