While the unemployment rate declined, the low number of new jobs created indicates continuing struggles for the U.S. economy.
The U.S. economy added only 96,000 jobs in August, according to the monthly employment report by the Bureau of Labor Statistics in the Department of Labor.
The number fell short of expectations; economists surveyed by Bloomberg had forecast a gain of 130,000 job gains. The unemployment rate slipped from 8.3% to 8.1%, in part due to decreased labor market participation.
The news also came as a disppointment after a blast of upbeat employment news earlier this week, including a report from payroll processing company ADP that had indicated a spurt in national job growth.
This year, the average monthly gain in new jobs has been 139,000--lower than the 153,000 average in 2011, Forbes notes.
The 12.5 million unemployment figure changed little in August, the Labor Department reports also reveals. Household survey data shows long-term unemployed individuals (jobless for 27 weeks or more) accounted for 5 million, or 40%, of all unemployed Americans.
"This is definitely a setback for the labor market and the economy," Michael Feroli, JPMorgan Chase's chief economist, told Bloomberg.