U.S. payrolls grew by a weaker-than-expected 96,000 in August, but the unemployment rate fell to 8.1 percent, the Labor Department reported Friday. Economists polled by Reuters and Bloomberg had predicted that employers would add 125,000 workers. The economy added 141,000 jobs in July.
The unemployment rate dropped two-tenths of a percentage point from July's 8.3 percent rate. But the drop was not a sign of hidden strength, instead reflecting an exodus of job seekers from the labor market.
The anemic jobs report comes as the Federal Reserve is set to hold a two-day meeting starting Sept. 12 to consider whether to take further actions to boost growth. Economists are mixed on whether the central bank might announce a new round of bond buying or other steps.
On the heels of President Obama's convention speech laying out his case for re-election, the report reinforces signs of a lackluster economy.