Private payrolls increased 99,000 in August, and the prior month's jobs gain was revised lower.

On a three-month annualized basis, the core PCE price index advanced 1.7%, the slowest this year, reinforcing the wisdom of Fed interest rate cuts next month.

This is an upward revision, reflecting stronger consumer spending on goods and services—particularly in healthcare, housing and utilities, and recreation.

"This doesn't challenge the idea we're still in an expansion, but it does signal we should expect monthly job growth to be more muted and put extra pressure on the Fed to cut rates."

Several big banks are projecting large negative revisions to Q1 jobs numbers, suggesting the labor market has been cooling for longer—and perhaps more dramatically—than originally thought.

The report showcases a consumer who is holding up despite higher borrowing costs, a cooling labor market, and an uncertain economic outlook.

A September rate cut by the Federal Reserve seems all but assured.

Initial claims fell by 17,000 last week, in part because of a drop in Michigan, Missouri, and Texas, states that had registered large increases in unemployment applications in prior weeks.