The government's survey of employers showed hiring slowed sharply during August to 96,000, down from 141,000 in July and well below the 125,000 forecast figure.
- The unemployment rate, which is derived from a separate survey of households, fell because the workforce shrank by 368,000 during the month.
- The participation rate, a measure of the people employed compared to the size of the workforce, fell to 63.5 percent in August - the lowest since September 1981 - from 63.7 percent a month earlier.
- A big drag on hiring came from the manufacturing sector, where payrolls dropped by 15,000.
The US economy created an extra 96,000 jobs in August, fewer than expected.
It means unemployment has falled from 8.3% to 8.1%.
All eyes are on the performance of the US economy as the Presidential election campaign gears up.
Barack Obama urged wavering supporters not to give up on their dreams of change - or on him - as he accepted the Democratic Party's nomination for president.
Daybreak's special correspondent John Stapleton reports from the convention in Charlotte, North Carolina:
Barack Obama talked about his achievements - ending the war in Iraq, drawing back on the war in Afghanistan, and about the death of Osama bin Laden.
He also talked about his other priority - building American infrastructure and investing in education.
It was an impressive performance and it electrified Democrats here, but let us also remember that he wasn't trying to reach the Democrats who will definitely vote for him - he's aiming to target those undecided voters in battleground states like Florida, Ohio, Colorado.
One section of President Obama's speech focussed on his opponent's foreign policy, mocking Mitt Romney's gaffe-filled visit to the UK.
"You might not be ready for diplomacy with Beijing if you can’t visit the Olympics without insulting our closest ally," he said.
President Obama: "No American should ever have to spend their golden years at the mercy of insurance companies.”
President Obama: “I will never turn Medicare into a voucher."