WASHINGTON — Stronger-than-expected July jobs number reported by the government Friday eased concerns about an economy slipping back into recession and gave wind to President Obama's re-election hopes. But economists warned that the road ahead is likely to remain bumpy.

Nonfarm payrolls grew by 163,000 jobs in July, according to the Labor Department. However, the unemployment rate inched up by less than a tenth of a percentage point, to 8.3 percent.

The strong report sent stocks soaring, with the Dow Jones industrial average up more than 220 points in the first hour, closing up 217.29.

Mainstream economists had expected about 100,000 new jobs, so Friday's report was far above expectations and more than double the revised 64,000 jobs added in June. Most heartening, economists said, was that the gains were spread across all sectors but construction and government hiring.

The good report didn't change the view of most economists that the economy will slow this year and that the Federal Reserve may take steps to boost economic activity in coming months.

Especially concerning to economists is uncertainty due to the European debt crisis, and doubt that Congress will take steps to halt legally mandated tax increases and budget cuts scheduled to take effect at the end of the year, the so-called fiscal cliff.

"I don't think job growth or the economy will improve much until these issues are sufficiently nailed down. Unfortunately, this won't happen until next year. But by this time next year I think we will have made enough progress on these thorny issues that job growth will accelerate and unemployment will fall," said Mark Zandi, chief economist of forecaster Moody's Analytics.

Michelle Meyer, senior U.S. economist for Bank of American Merrill Lynch, had a grimmer assessment.

"While this is better-than-expected news, it does not change our cautious outlook for the second half of the year. We continue to believe that the uncertainty from the fiscal cliff combined with spillover from the crisis in Europe will result in slower growth in the U.S.," she wrote in an investor note, projecting 1 percent growth over the second half of 2012. "Businesses will likely hold off capital expenditures, and households will likely postpone big-ticket purchases."

The president of the influential National Association of Manufacturers warned that Washington, D.C.'s inability to attack fiscal problems means the economy is "stuck in the mud."

"Manufacturers have been quite clear that their most significant concern is the uncertainty swirling around Washington, D.C.," said Jay Timmons, whose sector has added more than half a million jobs since January 2010. "An 8.3 percent national unemployment rate can't — and won't — improve if policymakers don't live up to their responsibilities and act to confront the major fiscal issues facing our country."

The jobs numbers were a boost for the Obama administration, which had tried just last week to put a happy face on sluggish second-quarter growth figures that showed the economy expanding at a subpar annualized rate of 1.5 percent.

"This morning, we learned that our businesses created 172,000 new jobs in the month of July. That means that we've now created 4.5 million new jobs over the last 29 months — and 1.1 million new jobs so far this year," the president said Friday.

The figure Obama cited was for private-sector payrolls. The overall number the Bureau of Labor Statistics reported was lower because it reflected 9,000 fewer government jobs in July.

Republicans seized on the jobless rate, which has been more than 8 percent for 42 months in Obama's term.

"Today's increase in the unemployment rate is a hammer blow to struggling middle-class families," said Mitt Romney, the Republican presidential candidate.

Three more monthly jobs reports will come out before Election Day, including the one for October on Friday, Nov. 2, just four days before Americans vote.

Between now and then, economists expect job growth of 100,000 to 150,000 a month, enough to employ those entering the workforce, but not enough to bring down the unemployment rate.

No modern president has faced re-election with unemployment so high. When President Jimmy Carter was bounced from office, the rate was 7.5 percent.

The breadth of the hiring encouraged economists. Professional and business services, a broad category that encompasses higher-paying white-collar jobs, was up by 49,000 jobs. The leisure and travel sector added 27,000.

The chief economist for the manufacturers association, Chad Moutray, wrote in his blog, Shopfloor, that the addition of 25,000 manufacturing jobs was helped by the creation of 12,800 jobs in the automotive sector.

On the downside, state and local governments shrank by 7,000 posts and federal government employment declined by 2,000. The hard-hit construction sector was essentially flat for the month, losing 1,000 jobs. The health-care sector has been a strong suit of the economy and it grew again in July, but only by a sluggish 12,000 jobs.

Within the unemployment numbers, there were continued signs of stress. The number of workers classified as discouraged or marginally attached to the workforce — short-handed as underemployed — inched up to 15.2 percent in July, from 15.1 percent in June.

Information from The Associated Press was used in this report.