U.S. employers slowed their pace of hiring in August. The U.S. Labor Department today said nonfarm payrolls grew by 169,000 last month.

That’s below what analysts had called for, and well below the 242,000 increase recorded in July.

However, the department also said employers created 44,000 more jobs in June and July than previously estimated.

The unemployment rate for August dropped to a four-year low of 4.9%.

Economists surveyed had predicted a 190,000 increase in payrolls, and a 5% unemployment rate.

There is growing speculation that the U.S. Federal Reserve might put a hold on its campaign of interest-rate increases in response to the damage wrought by hurricane Katrina. The U.S. central bank has raised its key federal-funds rate 10 times since June 2004, lifting it to 3.5% in increments of a quarter percentage point. Until this week, most economists were predicting the central bank would keep raising the rate through the end of the year.

But Katrina has prompted many forecasters to reconsider.

The U.S. Labor Department said Katrina had no effect on its numbers for August, because the jobs data were gathered before the hurricane struck.

The report showed the manufacturing industry cut jobs for a third month in a row, reducing payrolls by 14,000. But most other major industries added jobs. The construction industry added 25,000 jobs. The service-providing industry added 156,000 jobs.