The economy showed it is gaining strength after having a lackluster performance during the first three months of the year. The unemployment rate, which economists expected to hold steady, increased from 6.1 percent to 6.2 percent, according to data from the Labor Department.
July's numbers are far below the surge seen in June, when employers added 298,000 jobs. Friday's numbers are the sixth straight month the economy had added more than 200,000 jobs, the longest such period since 1997.
The median forecast of economist polled by Bloomberg had estimated a 230,000 increase in jobs for July.
The Federal Reserve, at the end of its two-day FOMC meeting Thursday, said it was happy with the progress of the economy but stressed concern about the health of the labor market, which they said was still below their targets.
"The economy still has a huge amount of headwind out there from the popping of the credit bubble," said Joshua Shapiro, chief United States economist for MFR. "We're not through that by any means."
Economists are also closely following wage growth, which if it continues to improve steadily could lead to the Fed increasing interest rates earlier than expected. Wage growth normally translates into increased consumer spending, which accounts for 70 percent of the U.S. economy.