The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 235,000 in August after a revised 1,053,000 increase in the prior month (originally a gain of 943,000). This was the smallest monthly advance since January.

According to the report, notable job gains were recorded in professional and business services (+74,000), transportation and warehousing (+53,000), private education (+40,000), manufacturing (+37,000), and other services (+37,000). At the same time, employment in retail trade (-29,000) declined over the month.

The unemployment rate dropped to 5.2 percent in August from 5.4 percent in July. This was the lowest rate since March 2020. Still, the rate remained well above the pre-crisis level of about 3.5 percent.

Economists had forecast the nonfarm payrolls to increase by 750,000 and the jobless rate to drop to 5.2 percent.

The labor force participation rate remained unchanged m-o-m at 61.7 percent, while hourly earnings for private-sector workers rose 0.6 percent m-o-m (or $0.17) to $30.73, following an unrevised 0.4 percent m-o-m gain in July. Economists had forecast the average hourly earnings to increase 0.3 percent m-o-m in August. Over the year, the average hourly earnings jumped 4.3 percent in August, following a revised 4.1 percent climb in July (originally a gain of 4.0 percent).

The average workweek was unchanged at 34.7 hours in August, being slightly above economists' forecast for 34.8 hours.