US employers added 169,000 workers to their payrolls last month and the jobless rate fell unexpectedly to 4.9%, its lowest level since August 2001.
While August's job creation tally fell slightly short of the 190,000 gain expected by Wall Street, the Labor Department said job growth in June and July was stronger than previously thought, bumping up the tally for those two months by a combined 44,000.
Job gains in August were broad-based, although factory employment slipped by 14,000 - the third consecutive monthly decline. Over the past year, the manufacturing sector has shed 110,000 workers.
The department said Hurricane Katrina did not impact the August job tally, since it crossed Florida and hit the Gulf Coast after the government had surveyed employers.
Economists expect the storm, which killed an untold number of people and left thousands more homeless, will prove only a temporary set-back to the nearly $12 trillion US economy. But it is expected to lead to a drop in payroll employment this month.
The decline in the unemployment rate came as a separate survey of households also found job creation robust. Analysts had expected it to hold steady at 5%.
The employment report showed construction payrolls grew by 25,000 - a figure surely to swell in the months ahead as rebuilding after Katrina gets underway. The service side of the economy created 156,000 jobs, spread across most sectors.
