* 151,000 jobs added in August vs est. 180,000
* Unemployment rate unchanged at 4.9 pct
* Lululemon falls after comparable-sales growth misses estimates
* Indexes up: Dow 0.54 pct, S&P 0.51 pct, Nasdaq 0.57 pct (Adds details, changes quote, updates price)
By Tanya Agrawal
Sept 2 (Reuters) - Wall Street was higher on Friday after data showed U.S. employment growth in August was slower than expected, which could rule out an interest rate increase this month.
The Labor Department's monthly jobs report showed nonfarm payrolls rose by 151,000 last month, while the unemployment rate remained unchanged at 4.9 percent.
Economists polled by Reuters had forecast addition of 180,000 jobs last month.
"This mixed jobs report puts the Fed in a tricky situation," said Mohamed El-Erian, chief economic adviser at Allianz in Newport Beach, California.
"It's not all around strong enough to assure a September interest rate hike. But it's solid enough to engender a heated policy discussion, especially given the unintended consequences and collateral damage of a prolonged period of ultra low interest rates."
Rate hike probabilities for September and December had risen after last Friday's remarks by Fed Chair Janet Yellen that the case for raising rates had strengthened in recent months. The Fed next meets on Sept. 20-21.
The odds of a rate hike in September stood at 24 percent, according to CME Group's FedWatch tool, while traders were pricing in a 56 percent chance of a December rate hike.
With the labor market near full employment, a slowdown in job growth is normal. Yellen has said the economy needs to create just under 100,000 jobs a month to keep up with population growth.
At 10:57 a.m. ET (1457 GMT), the Dow Jones industrial average was up 99.71 points, or 0.54 percent, at 18,519.01, the S&P 500 was up 11.1 points, or 0.51 percent, at 2,181.96 and the Nasdaq Composite was up 30.01 points, or 0.57 percent, at 5,257.21.
All 10 major S&P sectors were higher, with the consumer staples index's 0.77 percent rise leading the advancers.
Oil prices rose about 2.3 percent after the jobs report weighed on the dollar.
Lululemon Athletica shares were down 9.4 percent at $69.47 after the Canadian yoga wear retailer reported quarterly comparable-sales growth below expectations.
Ambarella was down 6.6 percent at $67.13 after the video processing chip maker reported a fall in quarterly sales.
Smith & Wesson was down 6.5 percent at $27.66 after brokerage Craig Hallum downgraded the gun maker. Sturm Ruger was also down 2.8 percent at $60.45.
Advancing issues outnumbered decliners on the NYSE by 2,333 to 508. On the Nasdaq, 1,888 issues rose and 732 fell.
The S&P 500 index showed 36 new 52-week highs and two new lows, while the Nasdaq recorded 117 new highs and 11 new lows. (Reporting by Tanya Agrawal; Editing by Don Sebastian)