Fed officials believe the rate is too low for a growing economy and must be lifted to prevent easy credit from fueling inflationary pressures in the future.
The August job gain is not "an especially strong number, but it does at least provide hope that the 'soft patch' may be fading," Ian Morris, chief economist at HSBC Securities USA, said in a note to clients today.
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Audio: The Washington Post's Nell Henderson discusses the latest unemployment report.
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The job market improved in August after two months in which the payroll increases, even after being revised upward in today's report, were so small that Labor Department economists view the totals as essentially unchanged.
Economic growth slowed sharply in the April-through-June period to a 2.8 percent annual rate from a more robust 4.5 percent in the first quarter, reflecting the effects of higher oil prices, falling exports and weak income growth.
Since then, the economy has probably picked up some speed, growing at about a 3.5 percent annual rate -- better than the second quarter but still well below the first quarter -- said Rich Yamarone, director of economic research at Argus Research Corp.
That's a pace "consistent with an economy on a path of prosperity, but certainly not a growth rate that is going to elicit any parties," Yamarone said, adding that it is not fast enough to generate "any meaningful job creation."
The jobless rate fell last month as the size of the labor force shrank. The share of the adult, civilian population in the labor force fell to 66 percent last month from 66.2 percent the month before.
After including people who say they want a job but are not looking actively, or who are working part-time only because they can't find full-time work, the rate of "underutilized" labor was 9.5 percent last month, unchanged from the month before, but down from 10.2 percent a year ago.
The jobless rate for white workers slipped to 4.7 percent last month from 4.8 percent the month before. Unemployment among blacks fell to 10.4 percent from 10.9 percent. Unemployment among Hispanic or Latino workers edged up to 6.9 percent from 6.8 percent.
"There is still plenty of excess labor supply," said Morris, of HSBC.
The job gains were spread widely among many industries, including manufacturing, construction, professional services, education, government and health care. The number of jobs dropped in retailing and telecommunications.
Paychecks improved last month. Average hourly earnings rose by 5 cents to $15.77, seasonally adjusted. Average weekly earnings rose $1.69 to $533.03
The share of the jobless who have been without work for more than six months grew to 20.7 percent in August from 20.4 percent the month before.
Hurricane Charley, which hit Florida Aug. 13, had no significant effect on the labor market figures, the department said.
