August payrolls rise less than forecast

Washington

US payrolls rose less than expected in August, but a drop in the unemployment rate to a near 71/2-year low of 5.1 per cent and an acceleration in wages kept alive prospects of a Federal Reserve interest rate hike later this month.

Non-farm payrolls increased 173,000 last month as the manufacturing sector lost the most jobs since July 2013, the Labor Department said on Friday. It marked a slowdown from July's upwardly revised gain of 245,000 and was the smallest rise in employment in five months.