The U.S. unemployment rate for July dropped slightly to 9.4 percent due to fewer job losses, the Labor Department said Friday.

Non-farm payroll jobs declined by 247,000, far less than expected, shaving one tick off the unemployment rate, which was at 9.5 percent in June.

Economists expected a loss of about 345,000 jobs and an increase in unemployment to 9.6 percent. The turnaround will certainly fuel the congratulatory rhetoric from the White House, where officials have been proclaiming the $787 billion stimulus spending plan a success, analysts said.

The Labor Department said wages increased 0.2 percent after holding even in June. Average hourly wages have increased 2.5 percent in the past 12 months, the department said.

In July, manufacturing employment dropped by 52,000 positions, but the number of workers in the automotive industry rose by 28,000 as factories retooled and fewer were laid off for the traditional summer hiatus.

Retail lost 44,000 jobs in July, while wholesale trades lost 19,000. The transportation and warehousing sector shed an additional 22,000.

Healthcare, which has largely escaped recessionary declines, added 20,000 jobs in the month.