The number of people signing on the dole fell by almost 2,000 last month.
Official figures from the Live Register revealed the numbers on unemployment benefits totalled 359,076 in August, down almost 40,000 in the last year.
The report follows statistics released earlier in the week that showed the number of people out of work increased by 400 to 206,500 last month.
That was the first rise after 26 consecutive months of net job growth.
Unemployment is at a six-year low of 9.5%.
The CSO said 208,399 men and 150,677 women sought dole payments in August, while the number of under 25s signing on has fallen by 11,629 to almost 50,000.
Despite the improving jobs market, the report revealed the long-term unemployment crisis remains with 164,269 people claiming benefits for a year or more.
Isme chief executive Mark Fielding said jobs growth is beginning to slow, saying cost pressures arising from the recent public sector wage agreement were hindering small and medium businesses.
“The recovery in the economy has stalled somewhat, from a jobs perspective,” said Mr Fielding.
“This is due to the threat of unsustainable wage expectations being encouraged by the public sector cave-in and minimum wage increases.
“Added to this is the campaign for the utopian ‘living wage’ being conducted by the junior minister for business and employment.
"SME owner managers will not take the risk of adding to their workforce with the prospect of continuous, and unrealistic, increases in wages.
“Budget 2016 must focus on creating the conditions necessary for job growth. It must restore confidence to SMEs.”
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