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With 130,000 jobs gained last month, NAFCU Chief Economist and Vice President of Research Curt Long said "August job growth failed to meet expectations, but this was still a solid report overall," adding that "both labor force participation and prime-age employment improved."

Although headline job growth fell below the year average, Long noted that "private sector growth was sufficient to absorb new entrants into the market. The overall picture of the labor market is still a strong one which represents a solid recessionary buffer, albeit one where job growth is clearly tapering as we approach full employment."

"Wage growth remains muted and presents no obstacle to a 25-basis point rate cut later this month. NAFCU continues to believe there is not enough in the overall economic data, including this report, to justify a 50-basis point rate reduction at this time," Long concluded.

The unemployment rate remained at 3.7 percent in August, while the labor force participation rate increased 0.2 percentage point from the previous month to 63.2 percent.

In other report data, private-sector payroll employment increased 96,000 jobs during August. The goods-producing sector increased 12,000 jobs, while the service sector increased 84,000 jobs. Public sector employment rose 34,000 from the prior month.

Average hourly earnings increased 11 cents to $28.11. Over the last 12 months, wages are up 3.2 percent.