Service providers increased payrolls by 178,000 workers, a three-month high. Gains were led by education and health services at 53,000 jobs, professional and business services with 53,000 and wholesale trade at 22,400.
Government payrolls decreased by 3,000. Private employment rose by 204,000, compared with a median estimate of 194,000.
The payroll gain ends a seven-year streak where the first reading for August has been below the median analyst estimate. The August figure has been revised upward in six of the past seven years.
Wages
Average hourly earnings rose 0.4 percent from the prior month following a 0.3 percent gain, the report showed. The annual gain followed a 2.7 percent advance in July.
A separate measure, average hourly earnings for production and non-supervisory workers, increased 2.8 percent from a year earlier, after a 2.7 percent gain.
The average work week for all private employees was unchanged at 34.5 hours in August.
The lackluster pace of wage gains ahead of the latest data has become a contentious issue for Republicans and Democrats heading into midterm congressional elections in November. The White House issued a report Wednesday arguing that compensation looks better when accounting for factors such as employment benefits, retiring baby boomers and this year’s tax cuts.
Unemployment
The jobless rate remains well below Fed estimates of levels sustainable in the long run. The latest figure reflects a decrease of 46,000 unemployed people in August and a 423,000 drop in the number of people with jobs.