The US job market brightened modestly in August as employers added 144,000 workers to their payrolls and hiring totals for the two prior months were revised up.
With the economy growing in importance as an issue in November presidential elections, the labour department said the August unemployment rate dropped to 5.4 per cent from 5.5 per cent in July.
It was the lowest rate since a matching 5.4 per cent in October 2001 and was certain to be cited by President George W. Bush as a sign that his tax cuts have helped stimulate economic activity.
The August new-job gain came in slightly below Wall Street analysts' forecasts for a 150,000-job gain but the department also revised up its totals for June and July job creation by 59,000. Economists said this likely meant that the US Federal Reserve will continue its policy of gradually ratcheting up interest rates.
A month ago, the department said that only 32,000 jobs were created in July but it more than doubled that estimate to 73,000 and it said 96,000 jobs were created in June instead of 78,000.
That created a moderately more favorable picture for summer job growth, but is likely to leave unresolved for now whether the economy was successfully shaking off a June soft patch as Fed policymakers expect it to do.
Economist Mr Drew Matus of Lehman Brothers in New York said the August jobs numbers were heartening when taken with the two prior months' revisions and an unchanged 33.8-hour work week.
"So altogether, not stellar but a solid report," Matus added.
Fed chairman Mr Alan Greenspan is scheduled to testify next Wednesday before the House of Representatives Budget Committee on the economic outlook, and may shed some light into whether policymakers are growing more confident about whether the economy is recovering its vigor.