Unemployment Rate Dips To 5.1 Percent Amid 173,000 New Jobs In August

Updated at 9:50 a.m. ET

The Labor Department says the U.S. economy added 173,000 jobs in August, a figure that fell short of expectations but nonetheless appeared to shrug off turmoil in overseas markets, particularly China.

In a separate survey, the department's Bureau of Labor Statistics said the unemployment rate had dipped to 5.1 percent — a seven-year low.

Many economists had forecast 220,000 new jobs in August, an increase over the 215,000 jobs added the month before. July's tally was revised upward to 245,000 jobs, while June's figure was revised to 245,000 from 231,000.

The three-month average is 221,000. Historically, August's payroll count tends to be revised upward in subsequent months by 75,000 to 100,000 jobs.

"Job growth in August was somewhat disappointing ... but the upward revisions to June and July suggest it is too early to conclude that the U.S. economy is experiencing a moderation in job growth," said Gad Levanon, director of macroeconomic and labor research at The Conference Board. "Given that the labor force is barely growing at all, current job growth rates will continue to rapidly lower the unemployment rate to below 5 percent by year's end."

The civilian labor force participation rate — essentially the pool of workers — remained at 62.6 percent for the third straight month.

The number of part-time workers was at 6.5 million last month, little changed from July. And the average workweek edged up 0.1 hour to 34.6 hours, an indication of more full-time positions.

Nonfarm payrolls rose by 8 cents, to an average of $25.09 per hour, following a 6-cent gain in July. Hourly earnings have increased 2.2 percent over the year, according to the BLS.

"Our economy has now added 8.0 million jobs over the past three years, a pace that has not been exceeded since 2000. And while the economy added jobs at a somewhat slower pace in August than in recent months, the unemployment rate fell to 5.1 percent — its lowest level since April 2008 — and the labor force participation rate remained stable," Jason Furman, chairman of the White House Council of Economic Advisers, said in a statement.

"Our businesses have now added 13.1 million jobs over 66 straight months, extending the longest streak on record," Furman said.

It's unclear how the latest report might impact a Federal Reserve meeting later this month, at which the possibility of raising interest rates is sure to be discussed.

Health care and social assistance accounted for 56,000 of the newly created jobs last month, while financial activities accounted for 19,000 positions. Food service and drinking establishments added 26,000 jobs.

By contrast, the manufacturing sector shed 17,000 jobs — despite a gain of 6,000 positions in auto and auto parts manufacturing and an additional 4,000 jobs in durable goods manufacturing. Mining lost 7,000 jobs.