Employment in the U.S. rose but much less than expected in the month of August, according to a report released by the Labor Department on Friday, although the report also showed an unexpected drop by the unemployment rate. The report showed that employment increased by 96,000 jobs in August following a downwardly revised increase of 141,000 jobs in July. Economists had expected an increase of about 125,000 jobs compared to the addition of 163,000 jobs originally reported for the previous month. While the service-providing sector added 119,000 jobs during the month, the increase was partly offset by the loss of 16,000 jobs in the goods-producing sector. Employment in the automotive industry fell by 7,500 jobs in August, contributing to the loss of jobs in the goods-producing sector. On the other hand, the leisure and hospitality industry saw an increase of 34,000 jobs. Employment in the professional and business services industry also rose by 28,000 jobs and the education and health services industry added another 22,000 jobs. Private sector employment as a whole rose for the 30th consecutive month, increasing by 103,000 jobs in August following an increase of 162,000 jobs in July. Meanwhile, government employment continued to decrease, edging down by a relatively modest 7,000 jobs in August after sliding by 21,000 jobs in July. Despite the weaker than expected job growth, the unemployment rate dropped to 8.1 percent in August from 8.3 in July amid a notable decrease in the size of the workforce. The unemployment rate had been expected to come in unchanged. With the unexpected decrease, the unemployment rate matched the three-year low that was set in April. The unemployment rate has not been lower since hitting 7.8 percent in January of 2009. However, the drop by the unemployment rate came as the workforce shrank by 368,000 people in August, while the volatile household survey showed that the number of employed people fell by 119,000. Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Under those circumstances, it is hard to characterize the drop in the unemployment rate as any sort of good news." Ashworth noted that the employment-to-population ratio dropped to a 12-month low of 58.3 percent when stripping out the swings in the labor force. "This failure to fulfill the full employment side of its dual mandate is why the Fed is expected to launch another round of large-scale asset purchases at next week's FOMC meeting," he added. The Labor Department report also showed that the average workweek for payroll employees was unchanged in August at 34.4 hours.