Companies added a net total of 67,000 new jobs last month and both July and June's private-sector job figures were upwardly revised, the Labor Department said Friday.
Stock futures surged after the report was released. Wall Street analysts expected a smaller gain, according to Thomson Reuters.
Overall, the economy lost 54,000 jobs as 114,000 temporary census positions came to an end. For the first time this year, the manufacturing sector lost jobs - down a net total of 27,000 for the month. State and local governments shed 10,000 positions.
Temporary employment rose by nearly 17,000, after ticking down in July.
The jobless rate rose to 9.6 percent from 9.5 percent in July. More than a half-million Americans resumed their job searches in August, which drove up the jobless rate. When the unemployed stop looking for work, they are no longer counted in the jobless rate. It's the first time the labor force has grown since April.
Both June and July's figures were revised to show the private sector created more jobs in both months. The July figures were revised upward to 107,000 from 71,000. June was revised upward to 61,000 from 31,000. The revisions reflected smaller losses in construction, temporary help services and non-census government jobs.
Still, hiring has now been weak for four straight months. That deprives consumers of cash and reduces their ability to spend. That is one of the main reasons economic growth is likely to be so weak for the rest of this year that the jobless rate could keep rising and hit 10 percent in the coming months.